The Chicago Federal Reserve Bank said Monday its Midwest Manufacturing Index fell for the ninth consecutive month in March, dropping 2.4 percent from February to a level of 82.0 points, its weakest level in 15 years. Compared with last year, US Midwest manufacturing output was down 23.2 percent, worse than the 14.9 percent national decline, which is likely due to the high concentration of steelmakers and automakers in the Midwest region of the US.
The Index shows that in March, US Midwest manufacturing shrank to its lowest level since February 1994. Three of the four Midwest industry sectors declined in March, with the biggest month-on-month decreases seen in steel and machinery and the biggest year-over-year output decrease taking place in the steel sector. Automotive manufacturing in the US Midwest also saw a large year-over-year decline in output in March.
The region's steel sector output dropped 5.5 percent in March from February after falling 4.3 percent in February from January. Regional steel output fell 34.1 percent in March compared to the same month the previous year, while national steel output in March shrank 24.2 percent compared to March of 2008.
Midwest machinery output also fell by 5.5 percent in March from February. Regional auto sector production rose 0.9 percent in March from February, compared to the nationwide decrease of 0.4 percent. However, the Midwest's automotive output was down 33.8 percent in March compared to the same month of the previous year, and the nation's auto output was down 20.5 percent compared to March 2008.
The Midwest's resource sector, which includes food, paper, minerals, chemicals and wood, also fell in March compared to February and compared to March 2008, declining 1.5 percent and 12.3 percent respectively.
The Chicago Fed Midwest Manufacturing Index is a monthly estimate of manufacturing output in the region by major industries. The Index covers the states of Illinois, Indiana, Iowa, Michigan and Wisconson.