Lackluster numbers in the spring have rebounded into a stronger industrial production outlook for the second half of 2013, according to analysts. The Federal Reserve reported industrial production was up .3 percent for June, which was on par with expectations. The numbers fell that much in April, and the manufacturing industry experienced no growth during the month of May.
Sectors which saw gains were automotive manufacturing, home electronics, and industrial machinery. This indicates an increase in demands by both consumers and businesses, a good indicator of a stronger economy. Production of information processing goods were down in June, but space and defense equipment rose .1 percent, the first gain in this sector during the entire year. Numbers for industrial production were also bolstered by stronger mining efforts.
However, there was some sour news to dampen enthusiasm. The outlook for the American industrial sector isn’t all bright for the second quarter of 2013. Manufacturing output fell .2 percent, following a 5.1 percent gain during the first quarter. During the first quarter of the year, the economy expanded by 1.8 percent, yet grew a mere 1 percent during the second quarter. Growth in manufacturing outpaced the overall growth of the economy early this year, according to Daniel Meckstroth, chief economist for the Manufacturers Alliance for Productivity and Innovation.
Several difficult circumstances face the U.S. manufacturing industry, including the economic recession in the Eurozone (which is now into its second year), and a slump in emerging economies such as China. Federal spending cuts due to sequestration are also curtailing demands for goods.
Most experts felt the news for manufacturing was encouraging, indicating that the slump of spring had bottomed out and manufacturing won’t slow the growth of the economy for the second half of 2013, according to Paul Dales, senior economist at Capital Economics. If the economy and labor market continues to improve, the federal government is expected to back off its bond buying stimulus.