The Federal Reserve Bank (www.federalreserve.gov/releases/g17) reported that industrial production, driven by a 0.7 percent increase in manufacturing output, rose 0.4 percent in December 2006.
”After three consecutive monthly declines, this upturn is a hopeful indication that the recent slowdown in industrial activity may be coming to an end,” said David Huether, chief economist for the National Association of Manufacturers. “For manufacturing, which accounts for more than three-quarters of industrial output, the 0.7 percent surge in activity was the strongest gain in six months,” Huether said. “It was driven by solid increases in computers and electronic products, machinery, aircraft, and motor vehicles as well as a number of nondurable products such as apparel and petroleum and coal.”
At the same time, 2006 was not a banner year for all manufacturers. “For sectors closely aligned with housing, such as wood products, furniture and nonmetallic minerals, production declined by nearly six percent,” Huether said. “Likewise, after significant increases between 2002 and 2004, a second-consecutive decline in car sales caused a contraction in motor vehicle production last year.”
Throughout 2006, manufacturing production increased 3.7 percent with overall Gross Domestic Production expected to be 3.1 percent. This means that manufacturing has outpaced the overall economy for the last three years.
