New data confirms manufacturing expanding at accelerated rate
The Federal Reserve reports that industrial production rose 0.3% in July, the third such increase in the past four months
The National Association of Manufacturers pointed to Wednesday’s Federal Reserve report that industrial production rose 0.3% in July, the third increase in the past four months, as an indication of a stable growth for industry.
“Mirroring the gain of the prior month, it’s clear that the manufacturing expansion is accelerating,” said David Huether, chief economist for the NAM. “In fact, the growth in manufacturing production over the past two months has been the best performance in a year.
“A 0.6% rise in manufacturing production in July was the main factor behind the rise in production last month,” he said.
Last month’s surge in manufacturing output was broad based, with 13 of 19 major manufacturing industries posting gains. Led by strong increases in motor vehicles, machinery, computers and electronics and primary metals, durable manufacturing production rose by 0.9%, marking the fastest growth in four months and the sixth consecutive monthly increase.
“This is a good indication that solid business investment and exports growth is continuing to offset the negative effects of the housing downturn,” Huether said.
Meanwhile, nondurable manufacturing production rose 0.3% last month. This increase was mainly driven by solid growth in petroleum and coal products as well as chemical production.
“While the up-tick in the manufacturing expansion has bypassed some sectors, such as textiles and apparel, a number of sectors that struggled earlier in the year are on the mend,” he said. “The housing downturn had a severe impact on manufacturers of wood products, nonmetallic minerals and furniture throughout 2006 and into this year. (The) report shows that these sectors are now starting to recover, which is a hopeful indication that the worst of the housing correction is behind us.”
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Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.
There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.
But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.
Read more: 2015 Salary Survey