Factory production increases in October

Factory production increased in October

The partial government shutdown has shown to have no effect on the manufacturing industry as factory production rose during October.

The Federal Reserve reported on Nov. 15 that the manufacturing output increased 0.3 percent during October. This is the third straight month of a boost in the industry and a rise from the originally predicted increase of 0.2 percent.

Businesses are still ordering
The report goes on to say that businesses are making more orders and the rate of output has played a part in the production jump. Brian Jones, a senior U.S. economist at Societe Generale, told Bloomberg the housing recovery and a demand for manufacturing will help keep up the production.

Government shutdown had no effect
This recent increase in business is proving that the government shutdown did not negatively affect the industry. The manufacturing industry added 19,000 jobs in October with the biggest additions being in the motor vehicles and parts, wood products and furniture sectors. Manufacturing makes up a small portion of the U.S. economy, but the industry is thought of as a guide to determine what businesses and consumers will buy.

Growth in certain sectors
Many areas
of the manufacturing industry saw minimal but positive improvements during October. The overall factory production is up 3.3 percent from a year ago, which is the best pace of growth since the end of 2012. Defense and space equipment output also increased by 0.5 percent. This is good news for this sector as it went through budget cuts earlier in the year. Even though October saw a jump in employment, the industry has seen a slow overall growth for the better part of the year.

Experts are encouraged by this growth as spring and early summer was a down time. Paul Dales, a senior U.S economist at Capital Economics, told the Houston Chronicle that the industry could see a steady growth.

"As long as the overseas recovery continues and the domestic fiscal drag fades, output should continue to grow at reasonable rates," Dales said.

Decreases in some areas
Although many areas in the industry saw growth, some sectors saw a decrease. Overall industrial production dropped 0.1 percent after having a 0.7 percent gain in September. The mining sector also saw a decrease as it had a 1.6 percent decline, breaking a streak of six months of gains.

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