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U.S. Manufacturing Output Rises In November

Fri, 12/14/2012 - 9:43am
Martin Crutsinger, AP Economics Writer

WASHINGTON (AP) -- U.S. factories rebounded in November from Superstorm Sandy, boosting production of cars, equipment and appliances.

The Federal Reserve says factory output increased 1.1 percent in November from October. That offset a 1 percent decline in the previous, which was blamed on the storm.

Total industrial output at factories, mines and utilities rose also rose 1.1 percent last month.

Auto production jumped 4.5 percent to lead widespread increases in factory output. It was the first increase in production at auto plants since July. Production of primary metals, wood products, electrical equipment and appliances all showed gains.

The increase in production is a hopeful sign that companies may not be panicking yet about looming tax increases that are set to take effect next month without a budget deal in Washington.


Cliff Waldman, Senior Economist for the Manufacturers Alliance for Productivity and Innovation (MAPI), has weighed in on the recent numbers:

“The impact of Hurricane Sandy continues to distort the monthly industrial production data. In November, manufacturing output increased by 1.1 percent, a near mirror image of the 1 percent decline seen during October as the devastating storm assaulted the industry-heavy northeast.   The sector data in November reflect a mix of storm impacts as well as positive and negative economic forces that are creating a murky outlook for the U.S. economy. The November advance was disproportionate because of a strong 4.5 percent gain in motor vehicle output on the heels of flat growth in October and two sharp output contractions in August and September. 

“An aging car fleet as well as unpredictable consumer spending (the exceptional recent volatility is being driven by modest improvement in the job and housing markets on the positive side and significant fiscal and global uncertainty on the negative side) are catalyzing wide swings in auto output,” he added. “The durability, and even acceleration of wood products output in recent months, corroborates other evidence of an improving housing picture.

“Recent data, in total, confirm the sharp slowdown in manufacturing output gains since the early months of the year,” Waldman concluded. “While weak factory sector growth is likely into the early months of 2013, U.S. manufacturing has not faced such a daunting set of uncertainties since the global crisis of 2008 and 2009.  Policymakers in Washington hold the short-term fate of the U.S. economy in their hands as difficult budget negotiations cloud an outlook that is already significantly compromised by a range of global problems. Goods demand, both domestically and from exports, has been compromised by global problems combined with the fiscal cliff. The possibility of an actual contraction in U.S. manufacturing output growth cannot be ruled out.”

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