WASHINGTON, D.C.-The report from the Federal Reserve that manufacturing production showed no change in September after edging down 0.4% in August does not accurately reflect what is going on in manufacturing, says David Huether, chief economist of the National Association of Manufacturers (NAM).
“While overall manufacturing activity was flat last month, there’s an awful lot of activity under the surface,” Huether says. “The ongoing downturn in housing continues to impact some segments of manufacturing, evidenced by the fact that wood products, nonmetallic minerals, furniture and textile product production all fell last month. Also, the disruptive strikes in the auto industry were a major cause of the 3.3% drop in motor vehicle production last month.
“But outside of motor vehicles, manufacturing production rose a solid 0.3% in September, with solid gains taking place in primary and fabricated metals, computers and electronics, electrical equipment, aerospace, medical equipment and chemicals,” Huether says.
“Overall, manufacturing production rose at a healthy 4.3 annual rate in the third quarter of the year. This is an encouraging sign for the overall economy and signals that despite the recession in the housing market, the overall expansion remains on track,” says Huether. “The fact that business equipment production rose at an annual rate of 7% in the third quarter, the fastest pace in a year, signals that business investment and capital goods exports are continuing to propel the economy forward.”
Industry News: Weak Fed Report Belies Strong Manufacturing Sector
November 21, 2007