Factories in the US slightly increased output in May after two consecutive months of declines, a clear sign that manufacturing does not do much to help economy.
Today, June 14th, the Federal Reserve said that factory production increased only 0.1% in May compared with April when output dropped 0.4% and 0.3% in March. Last month factories manufactured more autos, wood products and computers, offsetting declines in the production of primary metals and furniture. Over the past 12 months manufacturing rose only 1.7%.
“Manufacturers are still struggling to cope with the ongoing weakness of global demand,” said Paul Dales, senior U.S. economist at Capital Economics.
In May, overall industrial production was flat, utility output dropped 1.8% after a fall of 3.2% in April and mining output increased 0.7% after an increase of 1.1% in April. Manufacturing, which is a component of utmost importance for industrial production, has struggled so far this year, as factories were held back due to weak economies overseas, and therefore weaker demand for US-made products.
Analysts predict that manufacturing will increase in the following months, as orders have already begun to go up in April and consumers have increased their spending these months. Last month retail sales were up 0.6%, due to more car and truck purchases, sporting goods and home improvements.