Manufacturing production increased 1 percent in July, helping to lift the year-over-year pace of manufacturing output to 4.9 percent, its fastest annual pace since June 2012.
Last month’s gain stemmed largely from increased motor vehicle production, with all but three of the major manufacturing sectors notching higher output levels for the month, according to the National Association of Manufacturers.
At the same time, the utilization rate for manufacturers increased to 77.8 percent, nearly reaching pre-recession capacity levels.
The Empire State Manufacturing Survey reflected strong growth in August, albeit less so than the robust levels observed in July. More important, respondents to the Federal Reserve Bank of New York’s survey were significantly more upbeat, with roughly 60 percent anticipating higher sales and output during the next six months.
This study also reported that about 30 percent of manufacturers in its district planned to hire more workers and invest in additional capital expenditures in the coming months.
“This is welcome news, and it was largely consistent with the recent pickup in the labor market,”NAM chief economist Chad Moutray wrote in a weekly report. “Manufacturing job openings increased in June to their highest level in two years, with net hiring also accelerating. Of course, we already knew that to some extent. The most recent employment data found that manufacturers hired an additional 22,000 workers, on average, from May to July.”
Meanwhile, the European economy has shown signs of backtracking, with real GDP in the eurozone remaining unchanged in the second quarter.
The Markit Eurozone Manufacturing PMI report in July provided mixed news, with activity expanding for 13 straight months but growth continuing to ease over the course of this year. The latest data suggest that Europe’s economic challenges are still not behind them.