WASHINGTON – US manufacturing production rebounded less than expected in November as the boost from motor vehicle output was partially offset by persistent weakness in the aerospace industry, despite the end of a crippling strike by factory workers at Boeing.
Factory output increased 0.2 per cent in November after a downwardly revised 0.7 per cent decline in October, the Federal Reserve said on Dec 17. Economists polled by Reuters had forecast production rebounding 0.5 per cent after a previously reported 0.5 per cent decrease.
Production at factories declined 1.0 per cent on a year-on-year basis. Output had been depressed in the prior two months by the Boeing strike. Though the strike ended in early November, production of aerospace and miscellaneous transportation equipment has remained subdued.
Manufacturing, which accounts for 10.3 per cent of the economy, continues to tread water in the aftermath of the US central bank’s aggressive monetary policy tightening between March 2020 and July 2023.
Growth is, however, expected next year against the backdrop of lower interest rates. But tariffs on imported goods planned by President-elect Donald Trump’s incoming administration could raise prices for raw materials.
Motor vehicle and parts output soared 3.5 per cent in November. Production of aerospace and miscellaneous transportation equipment fell 2.6 per cent, attributed to declines in the manufacturing of aircraft parts. That followed a 6.7 per cent tumble in October.
Durable manufacturing production increased 0.7 per cent, also lifted by gains in machinery output.
Nondurable manufacturing output dropped 0.3 per cent, pulled down by decreases in the production of apparel and leather as well as petroleum and coal products, and paper.
Mining output decreased 0.9 per cent after edging down 0.1 per cent in October. Utilities production fell 1.3 per cent as unseasonably mild temperatures weighed on demand for electric and natural gas utilities. That followed a 1.3 per cent increase in October.
Industrial output slipped 0.1 per cent in November after sliding 0.4 per cent in October. It declined 0.9 per cent year-on-year in November.
Capacity utilisation for the industrial sector, a measure of how fully firms are using their resources, dropped to 76.8 per cent from 77.0 per cent in October. It is 2.9 percentage points below its 1972–2023 average. The operating rate for the manufacturing sector ticked up 0.1 percentage point to 76.0 per cent. It is 2.3 percentage points below its long-run average. REUTERS
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