WASHINGTON, (Reuters) – U.S. factory production accelerated in February, despite a continuing slump in vehicle production. This indicates that the U.S. manufacturing industry is strong amid a healthy consumer demand and a sustained level of strength.

According to the Federal Reserve, manufacturing output increased by 1.2% after increasing 0.1% in Jan.

Reuters polled economists and predicted factory output would accelerate 0.6%. Production rose 7.4% in February 2021 compared with February 2021.

The shift from goods to services spending during the COVID-19 epidemic has helped manufacturing, which makes up 11.9% of our economy.

Manufacturers have had to struggle with high demand and acute shortage of workers, which has been caused by coronavirus on factories floors and elsewhere along the supply chain.

In recent months supply bottlenecks showed signs of improving, however Russia’s aggression against Ukraine will likely halt that progress as well as the new China lockdowns after a rise in COVID-19-related infections.

Last month’s 3.5% decline in production at auto plants was the third consecutive monthly decrease. A global shortage in electronic components continues to limit motor vehicle production.

A 0.1% rise in mining activity combined with an increase in manufacturing output in February helped to boost industrial production by 0.5%. It followed an increase of 1.4% in January. Utilities production declined 2.7% following a jump of 10.4% in January, despite freezing temperatures throughout much of the country.

The manufacturing sector’s capacity utilization, which measures how well firms use their resources in a given time, rose 0.9 percentage points to 78.0% by February. This is 2.5 percentage points more than the pre-pandemic average, but only 0.1 percentage points below the long-run average.

Last month, the overall industrial sector capacity usage rose by 0.3% to 77.6%. The average 1972-2021 figure is only 1.9 percent lower.

Officials at the Fed tend to look at capacity use measures for signals of how much “slack” remains in the economy — how far growth has room to run before it becomes inflationary.