The American manufacturing industry continues to steam ahead in the right direction. While it experienced some stagnant growth and even contraction several years ago, it has since changed course. According to a new report published by the Commerce Department, orders placed to factories in the United States have increased by 1% in February. So, what does this mean for the future of the American manufacturing industry?
The Commerce Department’s previous reports also signaled positive growth for this key segment of the United States’ infrastructure. For January, manufacturing orders increased by an impressive 1.5%. While February’s numbers were slightly less, orders continued in this direction with a growth of 1%.
It hasn’t always been this way, however. Several years ago, a weak demand for American exports and weak overseas economies against the U.S. dollar hurt the American manufacturing industry. Market experts say these factors forced manufacturers to charge more for their products, which resulted in fewer products being sold. As the saying goes, though: what comes up most come down — and vise-versa. Over the past 18 months, the American manufacturing industry has rebounded, experiencing strong and positive growth paired with an increase in factory orders.
Market analysts cite several factors as attributing to the manufacturing industry’s growth, one of which is increased demand for commercial aircraft. Boeing has announced plans to increase its production efforts here in the U.S. President Trump has also expressed interest in helping aerospace manufacturing companies like Boeing produce more products here in the U.S. through the use of tax cuts and other incentives.
The report by the U.S. Commerce Department reveals that orders for durable goods — automobiles, airplanes, etc. — increased by 1.8% in February. On the other hand, demand for non-durable goods — paper, chemicals and other goods that last less than three years — increased by just 0.2% in February. Not surprisingly, the biggest segment of the durable goods market was commercial aircraft. The report found that growth in this sector was led by commercial aircraft at 47.5%. In January, growth was even higher for commercial aircraft at 83.2%.
On the other hand, however, business investments in the manufacturing industry declined in February. Analysts say this was the first month in which investments declined in five months.
All of these findings suggest that American manufacturing is back on track. It has its ebb and flow like any other market, though all reports signal towards a positive and prosperous market for manufacturing companies here in the U.S.No tags for this post.