Us Manufacturing Sector Grew In November

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Us Manufacturing Sector Grew In November

US Manufacturing Sector Grew 0.3% In November

With the end of the labor strike in the motor vehicle sector, US manufacturing production jumped higher in November. Despite the positive reading, the overall activity in the manufacturing sector is still weak due to low demand and high-interest rates.

Although the manufacturing sector faced a tough year, the US economy as a whole still showed expansion. In fact, a recent survey shows that the business activity in the USA during December actually improved. The reason behind this optimism was the services industry, which is experiencing high worker demand along with a rise in orders.

US Manufacturing Sector Remains Under Pressure

The US economy shows signs of positive growth, but it seems that industrial production is still in the negative. In September 2022, the industrial production of the USA peaked, which is not a good sign given the size of the US economy.

Given the weakness of the manufacturing sector, many experts believe that it will not contribute towards economic growth in the near term. On the contrary, there is hope for the services sector, which is showing signs of recovery.

In November, a +0.3% gain was witnessed in the manufacturing output. As for the previous month's data, the reading was revised lower from 0.7% to 0.8%.

If we exclude the motor parts and vehicles from the reading, the decline in the manufacturing output was -0.2%. Similarly, the decline in production on a Y/Y basis was recorded at 0.8% during November.

Despite the weakness in the manufacturing sector in the last few years, it still represents 10.2% of the US economy. The real enemy of the US manufacturing sector is the high-interest rates and slow domestic/international demand.

Even if we get the first rate cut in March 2024, it will take a long time for the manufacturing sector to recover from its contraction phase.

That's why it will be nothing more than wishful thinking to say that the manufacturing sector will return to growth any time soon.

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