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US manufacturing output up for sixth straight month in October
[WASHINGTON] US manufacturing production rose at a solid pace in October, marking the sixth straight advance as factories continued to recover from the depths of the pandemic-driven lockdowns earlier this year.
Output at factories increased 1 per cent from the prior month, matching the median forecast in a Bloomberg survey of economists, after an upwardly revised 0.1 per cent gain in September, Federal Reserve data showed Tuesday. Total industrial production, which also includes mining and utility output, rose 1.1 per cent in October after a 0.4 per cent decrease a month earlier.
The October gain in factory output was broad-based with increased production of consumer goods, business equipment and construction supplies that indicates a solid start to the fourth quarter. While output continues to improve against a backdrop of lean inventories and steady demand, supply chain disruptions and capital investment cutbacks remain challenges for the industry.
Despite the improvement last month, the Fed's index of manufacturing remains about 5 per cent below its level in February.
The Fed report follows several other measures that have pointed to steady improvement in the manufacturing sector. The Institute for Supply Management's manufacturing gauge rose to the highest since 2018 last month, as a measure of new orders surged to a 16-year high.
Meanwhile, employment and average hours worked in the sector also increased in October, according the government's monthly jobs report.
Manufacturing capacity utilisation picked up to 71.7 per cent from 71 per cent, while total capacity utilisation, including factories, mines and utilities, increased to 72.8 per cent from 72 per cent. Even with recent improvement, the overall plant-use rate is well below the 76.9 per cent seen in February. Unused capacity weighs on corporate profits because capital is underutilised.
Production of motor vehicles and parts declined for a third straight month. Factory output excluding auto production increased 1.1 per cent. Utility output rose 3.9 per cent as an increase in electricity demand offset a decline in natural gas production.
Mining output fell 0.6 per cent after a 1.2 per cent advance a month earlier.