US Manufacturing Growing at Fastest Rate in 2 Years

sparks-692122_960_720The United States manufacturing industry has expanded at its fastest pace in roughly two years, according to a recent report published by the Institute for Supply Management (ISM). Researchers say this trend reflects stronger output and more orders since August of 2009.

There’s been some talk of stagnant growth within the country’s manufacturing industry, leaving analysts skeptical of where it’s headed. These concerns have been further compounded by market volatility associated with the presidential election. This latest report published by the ISM, however, suggests the U.S. manufacturing market is growing at a fast pace — its fastest pace in two years.

The ISM gave the American Manufacturing industry an index of 54.7, which was the fourth consecutive increase (note: any index rating over 50 indicates positive growth). In comparison, the ISM gave the industry an index of 53.2 just one month earlier. So, how do these numbers compare to analysts’ forecast? Well, a survey conducted by Bloomberg predicated the American manufacturing industry would be given an index of 53.8. Therefore, it not only reached analysts’ expectations; it surpassed them.

Of course, analysts expected a strong start for the American manufacturing industry in 2017. Given the fourth quarter of 2016 saw strong growth for the industry, analysts expected the same would occur in the beginning of this year, which it did.

The manufacturing sector ended 2016 on a buoyant note, with promising signs that growth could pick up further in 2017,” said Chris Williamson, chief business economist at IHS Markit.

The strong index rating given by the ISM reflects the American manufacturing industry’s recent growth. As explained in the ISM’s report, the increased orders will help keep manufacturing factories profitable throughout the first quarter of 2017, while in turn building greater confidence for the market as a whole. And with greater confidence surrounding the American manufacturing industry, factory managers have begun hiring new employees.

The new hiring that is currently taking place in the manufacturing industry, along with producer-level inflation, has been linked to the interest rate hike announced by the Federal Reserve last month.

It’s also worth noting that stronger exports have further boosted the American manufacturing industry. With more and more manufacturing companies producing goods here in the U.S. and shipping them overseas, exports have been a strong element of the industry — a trend that will likely continue in the years to come.

So, where is the American manufacturing industry headed from here? You can check back with our blog for the latest news on American manufacturing, but all signs point towards a strong and prosperous future.


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