ARLINGTON, VA - An analysis from Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI, regarding the industrial production report for August 2010 indicates that manufacturing is recovering at a brisk pace.
“The Federal Reserve reported today that total industrial production and manufacturing production both increased 0.2 percent in August. Growth in both sectors was revised down by 0.4 percent in July: from 1 percent to 0.6 percent in total production and from 1.1 percent to 0.7 percent in manufacturing,” Meckstroth said. “A large 9.5-percent increase in motor vehicle production led to the surge in July but a 5-percent decline in motor vehicle production in August was a major factor in last month’s growth deceleration. Auto factory production schedules were atypical this summer and the deceleration in August should be discounted. Manufacturing production, excluding motor vehicles and parts, increased a rather strong 0.5 percent in August.
“Manufacturing is recovering at a brisk pace, and the August industrial production report confirms relatively widespread growth among industries - 14 of the 20 major manufacturing industries posted growth last month,” he noted. “The industrial sector is benefiting from strong export growth. A resurgence in repair, replacement and cost cutting motivated machinery and equipment spending and replacement demand for big ticket consumer items like appliances and motor vehicles. Manufacturing production will decelerate its pace of growth, reflecting the general weakness in the economic recovery, but should continue to outpace growth in GDP this year and next.”