Manufacturing Sector Displays Unexpected Vigor

Manufacturing Sector Displays Unexpected Vigor
Output Climbs as Payrolls Shrink; Surging Demand For Business Equipment

The Wall Street Journal 07/18/05
author: Jessica E. Vascellaro
author: Jon E. Hilsenrath
(Copyright (c) 2005, Dow Jones & Company, Inc.)

The import-heavy shelves of Home Depot, Wal-Mart and Best Buy paint a grim picture of the health of the U.S. industrial sector, which doesn't appear to be producing much of what American consumers are buying.

But that isn't the full picture. While employment keeps declining at American factories, they are cranking out more products than ever, and they are running closer to capacity than they have in half a decade.

In the past year, the growth in output of high-tech equipment, machinery and aerospace products has outpaced overall economic growth. Even production of motor vehicles -- despite the problems of Ford Motor Co. and General Motors Corp. -- is growing at a healthy pace, expanding by 8.5% in the past 12 months as foreign auto makers have increased output in the U.S. to win market share. Production of some consumer products -- like food and toiletries -- is also rising.

...

Industrial production rose 0.9% in June, the largest increase in nearly a year and a half.