Manufacturing Flattens, Even With December Production Jump

By January 15, 2010Economy

Manufacturing activity was flat in December as improvements are still not hitting the broad range of industrial sectors. December’s solid 0.6 rise in industrial production reported by the Federal Reserve today was driven mainly by unseasonably cold temperatures, which spurred the largest monthly gain in utility output in two decades. Still, manufacturing production in the fourth quarter rose at an annual rate of 6.1 percent due to earlier gains in November.

The past year was definitely one of transition for manufacturers. After declining at an annual rate of 15 percent in the first half of 2009, production rose at a 7.8 percent annual pace in the last six months. Overall, manufacturing production was down 4.4 percent in 2009, cutting in half the 2008 decline of 8.7 percent.

While the overall manufacturing production numbers appear promising, a closer look reveals that improvements in the second half of 2009 have not yet spread throughout America’s industrial base. Production gains in both the third and fourth quarters took place in only nine of the 19 major manufacturing industries, so the bulk of manufacturers are still struggling.

Looking ahead, results of the 4th quarter NAM/IndustryWeek Manufacturing Index — a quarterly survey of NAM member companies –signal a probable slow down in the manufacturing recovery. In fact, roughly half (52 percent) of the respondents to the fourth quarter survey expect that downturns in their company’s production will extend into the second half of 2010. The full results of the 4th Quarter NAM/IndustryWeek Manufacturing Index are posted at:


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