The Federal Reserve Board said that manufacturing production increased 0.4 percent in December, extending the 0.6 percent gains experienced in both October and November. This was the fifth consecutive monthly gain in manufacturing output, with the sector recovering from weaknesses seen in the spring months. Year-to-date growth in the manufacturing sector has definitely improved from the 1.2 percent pace experienced in July to 2.6 percent in December.

Manufacturing capacity utilization has also increased over the past few months, up from 75.7 percent in July to 76.9 percent in November to 77.2 percent in December. This was the highest level since March 2008 for the manufacturing sector.

Nondurable goods production outpaced durable goods output growth in December, up 0.9 percent versus 0.1 percent, respectively. With that said, on a year-over-year basis, durable goods output was up more strongly, up 4.1 percent since December 2012. Nondurable goods production rose a more modest 1.3 percent in 2013.

The strongest manufacturing output growth in December occurred in the following manufacturing sectors: printing and support (up 1.9 percent), motor vehicles and parts (up 1.6 percent), electrical equipment and appliances (up 1.4 percent), primary metals (up 1.4 percent), food, beverage and tobacco products (up 1.2 percent), apparel and leather (up 1.1 percent), petroleum and coal products (up 0.9 percent), and chemicals (up 0.8 percent).

With this being the last data point of 2013, we get a good glimpse of what sectors experienced the greatest output gains for the year. Certainly, much has been made of the rebound in the automotive sector, which had production growth of 7.2 percent for the year. Yet, the largest year-over-year increase occurred in the furniture and related products sector, up 9.4 percent. Other sectors with large gains in output in 2013 included fabricated metal products (up 4.5 percent), computer and electronic products (up 4.3 percent), aerospace and miscellaneous transportation (up 3.8 percent), wood products (up 3.8 percent), plastics and rubber products (up 3.7 percent), petroleum and coal products (up 3.1 percent), and electrical equipment and appliances (up 3.0 percent), among others.

Overall industrial production also grew strongly, up 0.3 percent in December. This extended the 1.0 percent gain experienced in November. In addition to manufacturing, industrial production data were boosted by a strong increase in mining output, up 0.8 percent for the month and 6.6 percent year-over-year. Meanwhile, while utility production rose 7.6 percent in 2013, it provided a drag of 1.4 percent in the December report.

In conclusion, manufacturing activity continues to expand, a trend that we have seen since the beginning of the third quarter. Manufacturers are generally upbeat about production growth in 2014, and these data suggest that output growth was up strongly as we ended 2013. Many observers feel that this might be the year that the economy finally starts to gain some traction, with real GDP and industrial production growth of 3 percent or more.

Yet, we have begun past years with a similar feeling of cautious optimism only to have such sentiment derailed. To keep the momentum going, policymakers should enact pro-growth measures that will keep allow manufacturers to expand and flourish, building on recent progress.

Chad Moutray is the chief economist, National Association of Manufacturers.

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