WASHINGTON, April 15 Reuters Production at U.S. factories rebounded in March amid strengthening domestic demand, with output of motor vehicles rising despite a global semiconductor chip shortage that has forced some automakers to cut production.

Manufacturing production jumped 2.7 last month after declining 3.7 in February, the Federal Reserve said on Thursday. Manufacturing production remains slightly below its prepandemic level.

Economists polled by Reuters had forecast manufacturing output increasing 4.0 in March. Production at factories rose at a 1.9 annualized rate in the first quarter after accelerating at a 12.4 pace in the OctoberDecember period.

Massive fiscal stimulus is fueling demand for goods amid lean inventories, underpinning manufacturing, which accounts for 11.9 of the U.S. economy.

But the shift in demand from services during the COVID19 pandemic has caused supply constraints across the industry. The Institute for Supply Management said this month suppliers continue to struggle to meet increasing rates of demand.

Supply constraints are more acute in the auto sector. Last week, General Motors Co and Ford Motor Co announced further vehicle production cuts because of the chip shortage.

Production at auto plants rebounded 2.8 in March after decreasing 10 in February.

The strength in manufacturing output combined with a 5.7 rebound in mining to boost industrial production by 1.4 last month. That followed a 2.6 drop in February. Utilities production…