A strong U.S. dollar and the decline in capital expenditure due to low oil prices could pressure the industrial sector and related exchange traded funds ahead.
U.S. industrial output fell in March, posting its first quarterly decline since the end of the recession, reports Eric Morath for the Wall Street Journal.
Industrial production, which includes manufacturers, utilities and mines, diminished a seasonally adjusted 0.6% from the prior month and declined at an annual rate of 1% over the first quarter, the first quarterly decrease since the second quarter of 2009, according to the Federal Reserve.
The decline in industrial production last quarter “resulted from a drop in oil and gas well drilling and servicing,” the Fed said. “And from a decrease in manufacturing production of 1.2%.”
The energy industry has been frantically cutting back spending and reducing costs in response to the plunge in oil prices. [Industrial ETFs Could Also Slip On Oil]
According to the Federal Reserve, manufacturing output rose 0.1% over March, its first increase in fourth months, after falling 0.2% in February, Bloomberg reports.