US industrial production fell 2.2 percent in February, the Federal Reserve said on Tuesday, a worse-than-expected figure caused by winter storms that knocked factories offline in parts of the country.

"The severe winter weather in the south central region of the country in mid-February accounted for the bulk of the declines in output for the month," the central bank said.

Manufacturing output fell 3.1 percent in the month, mining lost 5.4 percent, the report said. But utilities output increased 7.4 percent compared to January.

And overall production remains 4.2 percent below the February 2020 level.

Severe and unusual winter storms shuttered businesses and knocked out power in Texas, the country's second most-populous state.

Bad weather in Texas knocked out power across the state in February and caused an unexpected plunge in industrial production
Bad weather in Texas knocked out power across the state in February and caused an unexpected plunge in industrial production AFP / Suzanne CORDEIRO

"Most notably, some petroleum refineries, petrochemical facilities, and plastic resin plants suffered damage from the deep freeze and were offline for the rest of the month," the Fed said.

The central bank noted that without that storm, manufacturing would have fallen only around 0.5 percent nationwide, while mining would have increased by the same amount.

February's decline was the worst since the Covid-19 pandemic began last year and also partly fueled by the global shortage in semiconductors, said Oren Klachkin of Oxford Economics.

But he predicted government stimulus spending and the deployment of Covid-19 vaccines would restore growth in months ahead, though its pace could moderate as the service sector reopens later in the year.

"Healthy goods demand, healing business investment and historic fiscal stimulus are set to propel solid industrial sector growth," he said.

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