Fed Figures Show Manufacturing Still Growing

The Federal Reserve Board furnished more evidence Tuesday that the manufacturing economy--including the IT sector--continues to grow.

Industrial production rose 0.8% in January, and the output from makers of computer and office products rose 2.0%, according to preliminary figures issued by the Fed. In the past year, industrial production of computer goods rose 14.2% compared with 2.4% for all industries.

But there's still room for growth. Factories producing computer wares worked at 75.1% of capacity in January, up a full percentage point from December--but three percentage points lower than the sector's average from 1973 to 2003 and well below its peak of 86.6% in the mid-1990s.

Still, economists remain optimistic about economic growth for the remainder of the year. A panel of National Association of Business Economists members on Tuesday upgraded its forecast for this year's gross domestic product to 4.6% from the 4.5% projection it made in November. The economist forecast that real growth will rise at a slower but still strong pace of 3.8% in 2005.