Manufacturing production fell 3.1% in February, the largest decline in 10 months, with supply chain disruptions and weather hampering output in the sector for the month. The latest figures represent a pause in progress seen in recent months. Nonetheless, the forecast for manufacturing production suggests solid growth over the coming months, with output in the sector returning to pre-pandemic levels by the second or third quarter. Encouragingly, manufacturing activity expanded very strongly in March surveys from the New York and Philadelphia Federal Reserve Bank districts, with the latter’s composite index rising to the best reading since April 1974. Yet, input costs also accelerated sharply in both reports.
