Manufacturing AUTOMATION

U.S. industrial production expected to have grown in June, but manufacturing stayed weak

July 16, 2013
By The Associated Press

Overall output at U.S. factories, mines and utilities likely rose in June, but manufacturing remains weak.

Economists forecast that overall industrial production rose 0.3 per cent in June, according to a survey by FactSet. It was flat in May and fell 0.4 per cent in April.

Factory output, the most important component of industrial production, is likely to remain lacklustre after growing just 0.1 per cent in May and falling in March and April.

The Federal Reserve will release the May industrial production report at 9:15 a.m. EDT Friday.


Factories have struggled this year, providing little support to the U.S. economy. Manufacturing output was up just 1.7 per cent in 12 months that ended in May. And factories have cut jobs in each of the past four months, shedding a total of 24,000 since February.

A key reason for the weakness is slower global growth has cut demand for U.S. exports. China’s economy, for instance, grew at the slowest pace in more than two decades from April through June, according to data released Monday. And much of Europe is still in recession.

Manufacturing has shown improvement in Britain, France and Italy. Large Japanese manufacturers are also sounding optimistic for the first time in nearly two years.

The Institute for Supply Management said that U.S. factory activity improved in June after hitting its lowest level in four years. But the closely watched manufacturing survey reported that employment fell to its lowest level since September 2009.

There have been some positive signs that suggest factory production could increase in the second half of the year.

Factory activity in the New York region grew for the second straight month in July, according to the Federal Reserve Bank of New York’s Empire State manufacturing survey.

U.S. businesses reported a strong 1.1 per cent increase in sales in May, the Commerce Department reported. Those same firms only increased their stockpiles slightly, suggesting they will need to order more goods to keep up with demand.

And Americans bought more cars and trucks, furniture and clothes in June, according to a separate Commerce report on retail spending. But consumers cut back almost everywhere else, and overall retail sales rose just 0.4 per cent last month from May.

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