Monday Economic Report: Manufacturing Production Increased 1% in October

AICC, through its membership in the Council of Manufacturing Associations, is pleased to present the "Monday Economic Report" from the NATIONAL ASSOCIATION OF MANUFACTURERS (NAM).

By Chad Moutray, Ph.D., CBE – November 23, 2020

NAM Weekly Economic Toplines:

• New residential construction rose 4.9% to 1,530,000 units at the annual rate in October, the strongest pace since February. The data were buoyed by continued strength in the single-family segment, which increased to 1,179,000 units, the best reading since April 2007. Americans have responded to historically low mortgage rates, which hit another record low last week. Other data also reflected strength and optimism in the housing market, including the following:

• Manufacturing production increased 1.0% in October, strengthening after edging up just 0.1% in September and rising for the sixth straight month. Overall, manufacturing production remained 4.8% below the pre-pandemic pace in February, with output in the sector continuing to rebound following the 20.1% decline between February and April due to the COVID-19 pandemic. Here are some other developments of the relative health of the manufacturing sector:

• Manufacturing capacity utilization rose from 71.0% in September to 71.7% in October. This represents tremendous progress from the spring, but down from 75.2% in February.
• Total industrial production also rebounded in October, up 1.1% for the month, boosted by strength in manufacturing and utilities, but down 5.3% year-over-year.
• Surveys from the Kansas City, New York and Philadelphia Federal Reserve Banks each found continuing expansions in November in their districts, albeit with some slowing. Respondents remained upbeat in their outlook. In the Kansas City release, more than 50% had issues finding talent.

• Ohio created the most net new manufacturing jobs in October, adding 8,100 workers. The national unemployment rate fell to 6.9% in October, with Nebraska having the lowest in the nation, at 3.0%. Hawaii had the highest at 14.3%.

• Consumer spending at retailers slowed in October, increasing 0.3% following the 1.6% gain in September. More encouragingly, retail sales have now risen for six straight months following historic declines in the spring due to COVID-19-related retail closures. Over the past 12 months, retail sales have risen 5.7%.

P.S.: Due to the Thanksgiving holiday, the Monday Economic Report will not be published on Monday, Nov. 30. The next issue will be released on Monday, Dec. 7.

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