By Matt MacVey

Manufacturing growth picked up in March, shaking off the slowdown from the harsh winter that saw shipments of raw materials stalled and some factories literally too cold to stay open.

The Institute for Supply Management reported a manufacturing index of 53.7%, indicating that the manufacturing industry is growing faster than in February, which reported 53.2%. This was slightly below the Bloomberg consensus estimate of 54.0%. A number above 50% means that the economy is expanding.

March was the tenth month of consecutive expansion in manufacturing since a two month contraction in spring 2013. From July through November 2013, orders came in rapidly and assembly lines produced a lot of goods before this winter’s heavy weather and a slowdown in demand brought the index to near contractionary levels.

This is more than just a rebound from the winter dip. Increased production, new orders coming in to manufacturing firms, and growth in a broad base of regions and industries all indicate that the demand for manufactured goods is rising again.

New orders rose to 55.1% and the backlog of orders jumped up to 57.5%. The backlog of orders means that there is more demand for goods than factories can fill. Jim O’Sullivan of High Frequency Economics said that the rise in the backlog of orders is “absolutely” a good sign for the growth of manufacturing in the coming months and reinforces the faster growth in new orders.

New, affordable sources of energy from natural gas in shale are spurring growth in energy intensive industries like plastics, chemicals, and fertilizers. Growth at this rate in the manufacturing sector is consistent with growth in gross domestic product of 2.5% to 3% for quarter one according to Greg Daco.

Production for March was at 55.9%, meaning that factories increased their output. This is a dramatic gain from February’s production contraction of 48.2%. The rebound to the growth makes the low February number an outlier. Weather played a significant role in the manufacturing slowdown as did soft housing construction.

Petroleum and coal products topped the list of manufacturing sectors reporting growth in March. Coal producer Alpha Natural Resources saw demand from power plants in the East and Southeast that were scheduled to close, but were kept online to meet demand for heat from the cold winter.

“The very cold winter has been a very big driver for growth,” said Todd Allen of Alpha Natural Resources. Alpha Natural Resources will build coal inventory through the spring shoulder season to prepare to supply energy for more industrial production and air conditioning in the summer.

Employment stayed positive at 51.1%, but grew more slowly than in February. The Wells Fargo Economics Group analysis took the breadth of job growth, shown in 10 manufacturing sectors, as a positive sign for the strength of employment. Greg Daco of Oxford Economics thinks that the 51.1% employment number is in line with expectations of more than 200,000 jobs added to the payrolls for March in the jobs report that will be released this Friday.

On Tuesday automakers reported a rise in sales of 6%, exceeding analysts’ expectations. “When weather was bad, you didn’t have people going into the showroom,” says Chad Moutray, chief economist for the National Association of Manufacturers. The average age of a vehicle on the road now is 11 years, so there is a still pent-up demand for new autos left over from the recession and recovery.