Down but not Out
After struggling through the worst downturn in the postwar era, the manufacturing sector is showing some signs of life. Sure, a large share of the rebound in output over the past three months is due to automakers restarting shuttered facilities and expanding inventories depleted by “cash for clunkers”; however, those reasons alone don’t account for the sector’s recent improvement since output excluding autos grew at a 3.8 percent annualized clip during the third quarter of 2009. Total manufacturing output will likely not maintain a particularly robust pace of growth, and might endure the same kind of fits and starts that are expected for the economy as a whole. Nonetheless, a rebound in the auto production and inventory replenishment by businesses may help bridge the gap until capital spending, consumer spending and export demand are in better shape to form the basis of a self-sustaining recovery.
10-16-2009 4:30 PM