US factory production rebounded in September

WASHINGTON – U.S. manufacturers boosted output modestly last month, led by greater production of construction supplies, autos and petroleum products.

The Federal Reserve said Monday that factory production rose 0.2 per cent in September, following a decline of 0.5 per cent in the previous month. The broader industrial production category, which includes mining and utilities, ticked up 0.1 per cent.

Even with the gain, manufacturing output has been flat in the past year. Factories have been hit by several factors: weak business spending on machinery and other equipment, a strong dollar that has made U.S. goods more expensive overseas, and sharp cutbacks in oil and gas drilling that has lowered demand for pipeline.

Mining output rose 0.4 per cent last month, though it has fallen 9.4 per cent in the past year. Utility production fell 1 per cent.

With manufacturing production weak in the past year, factories have shed 47,000 jobs.

Other reports suggest there is some hope that factories are slowly recovering. A private survey found that manufacturers boosted production and saw a rise in new orders last month, according to the Institute for Supply Management, a trade group.

With new orders rising, production may increase in the coming months. Still, that survey found that factories were still cutting jobs.

And orders for manufactured goods increased in August, according to a separate report from the Commerce Department. A category that tracks business investment rose for the third straight month, a sign that business spending may be rebounding.

The weakness in manufacturing has weighed on the broader economy, which grew at a sluggish pace of 1.1 per cent in the first half of this year. Still, many economists expect a mild acceleration in the second half of the year to roughly 2 per cent.