September was productive month for U.S. manufacturers, economic report shows
U.S. manufacturers enjoyed a productive September with higher numbers of appliances, clothing and construction supplies making their way out of factory doors across the country, a recent economic survey shows.
According to Bloomberg, manufacturing contributed to a rise in U.S. output by 0.4 percent last month, reversing the 1.4 percent fall in August that was the largest drop since March 2009. Figures released by the Federal Reserve showed that factories, mines and utilities had all increased productivity, with retail sales also showing the first consecutive monthly gains in nearly two years, a sign that some economists believe may help to offset the slowdown in U.S. manufacturing orders as a result of overseas economic uncertainty.
"The economy is regaining momentum it appeared to have lost in the spring," said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. "I don’t think manufacturing is down for the count."
The data supplied by the Federal Reserve shows that factory output, an essential barometer of manufacturing strategy had increased by 0.2 percent in September, although factory production had fallen by 0.9 percent. Mining output had risen 0.9 percent as companies resumed production in the Gulf of Mexico at the end of the hurricane season, while utility output had increased by 1.5 percent.
As more companies are now producing goods domestically, the retail market provides a glimpse of consumer demand, with figures showing that sales climbed by 1.1 percent in September with auto dealers and electronics stores reporting a steady flow of business throughout the month.
Business analysts and industry leaders feel that the decline in production is linked to a number of business strategy factors, nearly all of which are beyond the control of U.S. manufacturers. The debt crisis in European markets and the slowing of growth in China have seen demand for exports decrease since the spring, while many companies are waiting to see if Congress will reach agreement on proposed tax increases and spending cuts, before making any decisions as regards purchasing new equipment and industrial machinery.
"We continue to be encouraged by positive signs from the housing sector, lower jobless claims, higher consumer sentiment and higher consumer spending," said Kurt McNeil, GM’s vice president of U.S. sales, in a conference call to Bloomberg. "The stiffest headwinds are uncertainty, some of which is related to the sovereign debt crisis in Europe and concerns about the pace of growth here at home."