Aug. 17 (UPI) — U.S. manufacturing is experiencing a revival, as indicated by a regional activity index that has rebounded in August, showing its first positive reading in almost a year, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.
“The August Manufacturing Business Outlook Survey reveals that manufacturing activity in the region has expanded overall,” confirmed the Philadelphia Federal Reserve Bank. “For the first time since May 2022, the survey’s indicators for general activity, new orders, and shipments all displayed positive readings.”
Earlier this year, manufacturers faced significant challenges due to supply-chain bottlenecks resulting from a surge in demand during the post-vaccine stage of the COVID-19 pandemic. Although new orders from manufacturers were contracting as recently as July, improvements in backlogs were noted, according to the Institute for Supply Management.
President Joe Biden, one year after the implementation of the Inflation Reduction Act, has lauded the success of his economic plan, citing a decrease in inflation and an increase in wages.
“Since I took office, our economic plan has generated over 13.4 million new jobs, including nearly 800,000 manufacturing jobs,” stated President Biden. “Why should America be restricted from creating the world’s most innovative economy and expanding its manufacturing sector?”
However, the report from the Philadelphia Federal Reserve Bank does come with some caveats. Respondents predicted a 4% increase in the prices of goods and services over the next year, compared to the previous month’s forecast of 5%.
Furthermore, while firms did add more employees to their payrolls, the overall outlook remains cautious.
“Although most future indexes in the survey remained positive, the expectations for growth in the next six months were less widespread, with a decline in optimism,” stated the manufacturing report.
Globally, manufacturing accounts for approximately 16% of the Gross Domestic Product, according to the World Bank.
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