Us manufacturing output rose at its fastest pace in four months in July, rebounding above pre-epidemic levels, indicating that manufacturers are struggling to address supply chain disruptions and supply shortages.
Data released on Tuesday showed that manufacturing output rose 1.4 per cent in July from a month earlier; it was revised down 0.3 per cent in June. Overall industrial output, including mining and utilities, rose 0.9 per cent in July.
The median expected by economists is 0.7% month-on-month growth in manufacturing output and 0.5% month-on-month growth in industrial output. Although the results included a surge in car production, the increase in production for the month was quite extensive.
Strong business spending, stable consumer demand and scarce inventories have boosted production growth, but have also exacerbated the backlog of orders as producers have struggled to procure raw materials and components; the mismatch between supply and demand highlights room for further growth in factory output, especially if producers have greater success in filling vacant jobs.
Manufacturers continue to face higher input prices and near-record job openings. Recent figures from the labor department show that the prices of processed goods used in production rose nearly 23% year-on-year, the biggest year-on-year increase since 1975. Meanwhile, manufacturing job openings are close to a record 826000.
Excluding cars and parts, manufacturing output grew by 0.7 per cent, compared with 0.1 per cent in June.
Manufacturing capacity utilization rose to 76.6 per cent, eventually breaking through the pre-pandemic level of 75.5 per cent. The utilization rate of total industrial capacity rose to 76.1%.