PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Industrial Sector Continued to Claw Back in July

By at 14 August, 2020, 3:18 pm

by Raymond J. Keating-

The industrial sector of the U.S. economy, of course, has been hit hard by the pandemic and shutdowns. And that includes manufacturing. But the latest industrial production (i.e., the actual output of the manufacturing, mining and utility sectors of our economy) numbers show that American industry continues to fight, trying to pull itself out of a deep hole and resume growth.

Industrial production expanded by 3.0 percent in July, which was the third consecutive month of growth. Part of that growth came from manufacturing production, which was up by 3.4 percent – again the third straight month of growth.

Source: Federal Reserve Bank of St. Louis, FRED

Source: Federal Reserve Bank of St. Louis, FRED

Again, though, the hole to climb out of is significant. Consider, for example, that industrial production in July was down by 8.2 percent compared to a year earlier, and off by 8.3 percent versus February of this year. The story is similar for manufacturing production – down by 7.7 percent versus July of last year and by 8.0 percent compared to February of this year.

Signs of industrial life amidst the current uncertainty is most welcome, and a tribute to U.S. businesses and workers, with manufacturing, by the way, overwhelmingly about small businesses, as, for example, 93.4 percent of employer manufacturers have fewer than 100 employees.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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