Manufacturing AUTOMATION

U.S. manufacturing output increases in September, but auto production slips

October 20, 2014
By Josh Boak The Associated Press

Oct. 20, 2014 – U.S. manufacturing output rose in September, led by gains for aerospace products, furniture, clothing and plastics.

The Federal Reserve said Thursday that factory production rose 0.5 per cent in September after falling 0.5 per cent in August. Over the past 12 months, manufacturing output has increased 3.7 per cent.

The continued pace of manufacturing output will likely be a bellwether for the broader economy. Job growth has been solid for much of 2014, yet the stock market has been hammered over the past week over concerns about Europe’s financial footing, the slowdown in China’s economy and Ebola outbreaks across three continents. Stalled growth — if not a recession — in much of Europe could cut into demand for U.S. exports.

Total industrial production surged one per cent last month, as output from mines and utilities both increased.


Despite the gains, autos appear to have downshifted after driving much of the output growth of the past year. Factory production of motor vehicles and parts slid 1.4 per cent in September, the second straight monthly decline after tumbling seven per cent in August. Most economists expected a decline after auto production soared in July, largely because fewer plant shutdowns in July made output look stronger after the government adjusted the figure for normal seasonal variations.

That decline was more than offset by improvements in other sectors. Furniture output rose 2.4 per cent in September, while aerospace products climbed 1.7 per cent. Clothing increased 1.5 per cent, as plastics, rubber, chemicals and computer production also improved.

Output at utilities surged 3.9 per cent last month, likely because hotter than normal temperatures caused more people to crank up the air conditioning. Mining output grew 1.8 per cent and has advanced 9.1 per cent over the past year, reflecting the shale gas boom.

Other recent manufacturing indicators have been mixed.

The Institute for Supply Management, a trade group of purchasing managers, reported that the pace of manufacturing growth fell in September. Its manufacturing index fell to 56.6 from 59 in August. Anything above 50 signals that manufacturing is growing, yet the survey-based index noted that expectations for hiring and new orders declined from their August levels.

Separately, the Commerce Department said that orders to U.S. factories fell in August by the largest amount on record, declining 10.1 per cent after a record increase of 10.5 per cent in August. Both months in the government report were affected by swings in demand for commercial aircraft, which soared in July only to plummet in August.

The U.S. economy grew at a 4.2 per cent annual rate in the April-June quarter, a significant rebound from a 2.1 per cent contraction in the first quarter that reflected in part a severe winter that disrupted a number of activities.

Economists expect that continued gains in employment will spur consumer spending and translate into annual growth of around three per cent in the second half of this year.

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