WASHINGTON (AP) -- U.S. industrial production likely rose at a modest pace last month after a surprisingly strong February.
Economists forecast that output at the nation's factories, mines and utilities increased 0.2 percent in March from February, according to a survey by FactSet. It rose 0.7 percent in February, helped by a big increase in auto production.
The Federal Reserve will release the report at 9:15 a.m. EDT Tuesday.
In February, factory output, the largest component of industrial production, rose 0.8 percent. The biggest gain was in autos and auto parts, where production increased 3.6 percent. Car sales have risen steadily this year after reaching a five-year high in 2012.
More recent reports from the nation's factories have been disappointing. The Federal Reserve Bank of New York reported Monday that manufacturing growth in the New York slowed this month. And a private survey from the Institute for Supply Management showed that manufacturing nationwide expanded more slowly in March than it did in February, held back by weaker growth in production and new orders.
The U.S. economy also shed 3,000 manufacturing jobs in March and factory employees worked fewer hours.
Output may be slowed in March after U.S. factories saw less demand in February for long-lasting goods that signal business investment plans. Still, the decline followed a gain in January that was the biggest in nearly three years.
Analysts said that when averaging the two months, business investment orders showed a solid increase for the January-March quarter. That's among the reasons some are predicting growth could increase to around 3 percent in the first quarter, up from 0.4 percent in the previous three months.
Still, many predict growth will slow again in the April-June quarter, as the impact of higher Social Security taxes and government spending cuts begin to weigh on the economy. Both threaten to slow factory activity in the spring and summer.
More disappointing economic news arrived Monday, contributing to a 266-point, 1.8 percent drop in the Dow Jones industrial average.
The National Association of Home Builders/Wells Fargo builder sentiment index released Monday fell this month to 42 from 44 in March, the third drop since January. Measures of customer traffic and current sales conditions both declined from March's reading.
Homebuilders are worried that that limited land and rising costs for building materials and labor will slow sales temporarily. But their outlook for sales over the next six months climbed to the highest level in more than six years — suggesting the obstacles could be temporary.
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