In June 2024, U.S. manufacturing output exceeded analysts’ expectations, rising by 0.4%. This growth not only boosted the manufacturing sector but also contributed significantly to a strong performance in the second quarter. The positive trend followed a solid 1.0% increase in May, signaling that the recovery in the industrial sector is gaining momentum. Over the past year, manufacturing production increased by 1.1%, indicating sustained growth despite the challenges posed by earlier in the year.
For the second quarter, the annualized growth rate for manufacturing reached an impressive 3.4%, bouncing back from a 1.3% decline recorded in the first quarter of 2024. This strong recovery in the manufacturing sector is particularly encouraging, as it suggests a resilient economy capable of withstanding previous setbacks. The month of June also saw a notable increase in production in key sectors, such as motor vehicles and parts, which rose by 1.6%.
Despite some areas showing slower growth, such as durable goods manufacturing, which remained flat, other sectors continued to show progress. Non-durable goods manufacturing saw an uptick of 0.8%, reflecting steady demand in areas like chemicals and food products. This diverse growth across various segments is an important indicator that different parts of the industrial economy are benefiting from a combination of domestic demand and global supply chain improvements.
In addition to the manufacturing sector’s strength, overall industrial production also improved in June, increasing by 0.6%. This broader category includes mining and utilities, both of which showed modest gains. Mining output grew by 0.3%, while production in utilities saw a more substantial increase of 2.8%. These gains reflect rising demand across multiple industries and highlight the overall improvement in the industrial landscape.
Capacity utilization in the industrial sector rose to 78.8% in June, another encouraging sign that production capabilities are being more effectively utilized across the economy. This metric, which indicates the percentage of total industrial production capacity that is in use, is a critical gauge of economic health. A higher utilization rate typically signals strong economic activity, as businesses increase production to meet growing demand.
The positive data from June marks a clear shift in momentum, with manufacturing output playing a key role in driving the economy forward. With the second quarter looking stronger than expected, this growth could signal a more stable economic outlook heading into the second half of 2024.
