2016.05.1806:05:00UTC+00Us April Industrial Production Ticks up on Surge in Utility Output

The United States April industrial production, ticked higher, though still in red on surge in utility output and as demand levels for electricity and natural gas rose more-than-normal. US April factory output expanded makers of machinery and cars posted solid production upswings, a sign that the country's manufacturing sector was responding to the downward pull from sputtering global growth.

Manufacturing output rose 0.3 percent, the Federal Reserve said on Tuesday. The reading matched the gain expected in a Reuters poll of economists. Rising for the first time in three months, industrial production increased 0.7 pct in April, beating forecasts of 0.3 pct gain as gains from manufacturing and utilities offset continued weakness from mining. Utilities output rebounded from March when it was restrained by warmer-than-usual weather. However, mining output fell 2.3 pct in April.

The industrial sector has been undermined by a slowing global economy and robust dollar, which have eroded demand for US manufactured goods. Manufacturing output has been flat in the last six months. But there are signs that the worst downturn in the industrial sector is over, with recent manufacturing surveys turning higher. In addition, the dollar's rally has fizzled and oil prices appear to be stabilizing in the near term.

"Manufacturing is slowly recovering. The headwinds seem to be fading and the sector is moving forward at a moderate pace," said Michael Carey, chief economist, North America, Credit Agricole CIB, New York.