Manufacturing powered ahead last month

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The nation’s factories churned out another increase in production last month, posting a 0.2 percent rise that adds to a nearly uninterrupted string of gains in the last year, the Federal Reserve reported Wednesday morning.

The 13th monthly increase in output in the last 14 months was fueled by a combination of strong exports to fast-growing developing countries like China and India and a revival of computer equipment purchases by U.S. businesses. That has enabled manufacturing to do better than the overall economy so far this year.

“The recovery of industrial production has continued with little interruption since July of 2009, but the pace of expansion is slowing,” said Tim Quinlan, economist with Wells Fargo Securities, adding that “after scrimping during the recession, businesses appear to be updating their hardware.”

Last month, production gains slowed to 0.2 percent from 0.6 percent in July. The July increase originally had been reported as 1 percent.

Pulling down last month’s increase was a 5 percent drop in auto output, which had surged by 9.5 percent the month before.

Mr. Quinlan said the absence of the usual summer shutdown at automakers this year to retool plants for the new model year appears to have wreaked havoc with the Fed’s seasonal adjustment figures and made them less accurate. Economists for that reason are discounting the auto figures.

The temporary decline in autos was offset by a jump of 0.7 percent in production of computer equipment and unusually strong performance in most other industries.

“The industrial sector is benefiting from strong export growth,” said Daniel C. Meckstroth, chief economist at the Manufacturers Alliance/MAPI. “Manufacturing production will decelerate its pace of growth, reflecting the general weakness in the economic recovery, but should continue to outpace [overall economic growth] this year and next.”

Overall, factories continue to operate at far less than full capacity as a result of the recession. Factories are operating on average at less than 75 percent of capacity at present, the Fed report said.

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