Analysis

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Real gross domestic product increased 0.3% in March, following a 0.1% decline in February. Goods production increased 0.9% while the output of service industries was essentially unchanged. Manufacturing and, to a much lesser extent, construction and transportation were the main sources of growth. Wholesale trade and utilities also advanced. Retail trade as well as the finance and insurance sector recorded declines. Overall, mining and oil and gas extraction showed very little change for a third consecutive month.

Manufacturing grew 1.8% in March, after a 1.0% decrease in February. Durable goods manufacturing advanced 2.8%, while the production of non-durable goods increased 0.5%. Fabricated metal products, transportation equipment and machinery led the increases. Manufacturing of wood products, food, beverage and tobacco products declined.

Construction rose 0.7%, with all major components (residential and non residential buildings, engineering and repair work) increasing.

Transportation rose 0.7% primarily due to gains in truck and rail transportation.

Wholesale trade grew 0.4% in March. Wholesaling of petroleum products, motor vehicles and miscellaneous products (which includes recyclable materials) led the way. Conversely, retail trade decreased by 1.0% as lower activity was recorded at clothing and accessories stores, food and beverage stores, and pharmacies.

The finance and insurance sector fell 0.9% in March. The decrease was mostly attributable to declines in the volume of personal loans, deposits and sales of mutual funds as well as in the volume of trading on the stock exchanges.

Overall, mining and oil and gas extraction edged up 0.1%. Support activities for mining, oil and gas extraction were up 9.7%. Metal ore mining also advanced in March. In contrast, oil and gas extraction declined due to lower crude petroleum production.

First quarter 2011

All major industrial sectors, with the exception of retail trade and arts and entertainment, increased their output in the first quarter. Goods production rose 1.8% while service-producing industries increased 0.7%. Manufacturing as well as mining and oil and gas extraction were the largest contributors to growth. Construction, transportation and wholesale trade also recorded notable increases.

Manufacturing increased 2.0% as both durable goods (+2.6%) and non-durable goods (+1.1%) rose. Machinery, transportation equipment, fabricated metal products and plastics and rubber products were the largest contributors to growth. The largest decreases were recorded in petroleum and coal products as well as in computer and electronic products.

Mining and oil and gas extraction was up 1.6%, the sixth consecutive quarterly increase. Oil and gas extraction advanced 1.5% with both oil and gas production increasing. Exports of energy-related products rose in the first quarter. Mining advanced 1.1% with output at potash mines providing the largest contribution.

Construction rose 1.7% in the first quarter. Engineering and repair work as well as residential building construction advanced, while non-residential building construction edged down. The output of real estate agents and brokers posted a second consecutive quarterly increase.

Activity in the transportation sector advanced primarily on the strength of truck and rail transportation as well as pipeline transportation of natural gas.

Wholesale trade advanced 1.4% in the first quarter. Strength in building materials, motor vehicles and parts as well as machinery and equipment far outweighed decreases in petroleum and farm products.