PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

ECONOMIC NEWS: Industrial Production Shows Continued Growth in June

By at 16 July, 2021, 9:47 am

by Raymond J. Keating –

The Federal Reserve’s latest take on industrial production – i.e., the actual output of the manufacturing, mining and utility sectors of our economy – indicated growth of 0.4 percent in June. The data show growth in three of the last four months, after a weather-related decline in February.

The initial look at manufacturing production (the biggest share of industrial production) – declining by 0.1 percent in June – must be put in fuller context, as the shortage in semiconductors led to a 6.6 percent decline in the production of motor vehicles and part. Factoring out motor vehicles and parts, manufacturing output grew by 0.4 percent.

Mining output was up by 1.4 percent in June, with utilities output increasing by 2.7 percent.

Placing production in context of recent time and events, total industrial production was up by 9.8 percent in June compared to a year earlier, but still down by 1.2 percent versus pre-pandemic February 2020.

Manufacturing output also was up by 9.8 percent in June compared to a year earlier, and off by 0.8 percent versus pre-pandemic February 2020. For good measure, as SBE Council has noted before (see the following chart), manufacturing output still has not recovered to where it was before the late-2007-to-mid-2009 Great Recession.

That should serve as a warning to the Biden administration and Congress regarding any policies that would increase tax and regulatory costs, or limit trade opportunities, for U.S. manufacturers, entrepreneurs and investors.

Industrial enterprises, like the rest of our economy, need relief from governmental costs, not additional burdens being hoisted on their backs.

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

 

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