The industrial side of the U.S. economy is marking time, as industrial production was unchanged in March for the second month in a row. This stability follows a strong 0.7% gain in January and an even more outsized increase of 0.9% in December.

All told, this core component of the industrial sector has gained a solid, if unspectacular, 3.8% over the past year. As for the latest month, however, industrial output eased by 0.2% in manufacturing, which is by far the largest component, but rose by 0.2% in mining, and by a very strong 1.5% in the utility sector.

The pullback in manufacturing is somewhat worrisome, however, and follows gains in that category of 1.5%, 1.1%, and 0.8%, respectively in December, January, and February.

At the same time, capacity utilization at the nation's factories fell nominally last month to 78.6%, which was down from February's reading of 78.7%. Output was at 78.7% in January as well, and is up just incrementally over the past year. Once again, there was some slippage in the manufacturing area, with utilization here dipping from February's 78.0% reading to last month's 77.8% result. However, usage rose in mining and at the nation's utilities.

Overall, this was an uninspiring report, but probably does not change the overall picture, which suggests that GDP growth in the most recent three months likely was in the range of 2.5%. Although that would mark a reduction from the 3.0% growth rate recorded in the final quarter of 2011, that prior aggregate rate of growth included some major increases in inventory accumulation. In the first quarter, our sense is that there was a modest drawdown in inventory accumulation. Thus, on an apples-to-apples basis, and excluding inventory changes, GDP likely was a little stronger in the recently concluded three months than in late 2011.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.