New data show manufacturing expansion is accelerating
The National Association of Manufacturers pointed to a recent 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 added.
The July surge in manufacturing output was broad based, with 13 of 19 major manufacturing industries posting gains. 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.”