Monday, April 21st5.3°C

US factory production rises solid 0.6 per cent November, led by surge in auto output

WASHINGTON - U.S. factories increased output in November for the fourth straight month, led by a surge in auto production. The gains show manufacturing is strengthening and could help boost economic growth at the end of the year.

Factory production rose 0.6 per cent in November after a 0.5 per cent gain in October, the Federal Reserve said Monday.

Production of motor vehicles and parts increased 3.4 per cent, rebounding from a 1.3 per cent decline in October. Factories also stepped up production of home electronics and chemical products.

Industrial production, which includes manufacturing, mining and utilities, rose 1.1 per cent in November. It was the fourth straight gain.

Colder-than-average temperatures drove a 3.9 per cent surge in utility production. Mining output jumped 1.7 per cent to reverse a similar decline in October.

Overall production for the first time surpassed the pre-recession peak set in December 2007, the month the Great Recession began. Output is now 21 per cent above its recession low hit in June 2009, the month the downturn ended.

The report of healthier output at U.S. factories helped drive a rally on Wall Street. The Dow Jones industrial average rose 129 points to finish at 15,885 for the day.

Paul Dales, senior U.S. economist at Capital Economics, said the gains in mining and utilities can be volatile. He noted that the best guide of the underlying trend is manufacturing output.

"It suggests that producers are benefiting from stronger demand at home and overseas," Dales said.

Factories are busier in part because overseas growth has picked up and the housing recovery has driven more demand for furniture and other wood products. Automakers are also having their best year for sales since the recession.

Separately, the Federal Reserve Bank of New York said manufacturing in the New York region grew for the sixth time in the past seven months, although the gains were only modest.

The solid gains at U.S. factories follow other positive signs for manufacturing last month.

A closely watched report from the Institute for Supply Management showed factory activity climbed in November at the fastest pace in 2 1/2 years. Factories ramped up production, stepped up hiring and received orders at a healthy clip.

And the government's November employment report showed that factories added 27,000 jobs last month, the fourth straight month of gains and the most since March 2012.

The pickup at factories could help an economy that is starting to accelerate.

The U.S. economy grew at an annual rate of 3.6 per cent in the July-September quarter. Nearly half of the growth came from a buildup in business stockpiles, which can be volatile.

Consumer spending slowed to the weakest pace since the end of the recession. But that was mostly because of a decline in utility spending. Spending on goods rose at the fastest pace since early 2012.

Companies could slow their inventory growth in the October-December quarter if they don't see enough demand from consumers. That would weigh on overall economic growth.

Many economists are predicting growth will slow to an annual rate of between 2 per cent and 2.5 per cent.

Still, a recent government report showed restocking rose in October at the fastest pace in nine months. At the same time, consumers stepped up spending at retail businesses in November. If those trends continue, growth could be stronger.

The Canadian Press

Read more Business News


Recent Trending

Today's Market
S&P TSX14496.85-3.54
S&P CDNX997.84-0.93
S&P 5001865.63+0.78
CDN Dollar0.9077+0.0006
Natural Gas4.726-0.015

Okanagan Companies
Pacific Safety0.115+0.01
QHR Technologies Inc1.25-0.04
Anavex Life Sciences0.39+0.015
Metalex Ventures0.08+0.005
Russel Metals30.58-0.08
Copper Mountain Mining2.29-0.06
Colorado Resources0.26+0.005
ReliaBrand Inc0.12-0.01
Sunrise Resources Ltd0.025-0.005
Mission Ready Services0.25+0.02



19205702532 Shoreline Drive
2 bedrooms 2 baths
more details
Click here to feature your property
Please wait... loading

Learning to flirt with the edge

With all of the adventure activities I have done and still do, I wonder sometimes if the edge still exists. The systematic approach to learning a new adventure or extreme activity combined with the r...

Time spent prospecting

How much time should you put into prospecting? The question is a bit of a puzzle. Ideally, there would be a reference book that lists, by industry, how much time you should invest in prospecting acti...

Valuation fears grip markets

The Big Picture Valuation fears grip markets Growing concerns about the level of stock market valuations sparked a risk-off trade in global markets this week. Investors are worried that many companies...




Member of BC Press Council