US Manufacturing Expanded in August

U.S. manufacturing expanded at a faster rate in August 2014 than it had for the previous three years, leading to a boost in the nation's economy. This latest trend indicates that the U.S. manufacturing sector, which has been struggling for several years, could finally be recovering from the economic downturn.

Bloomberg recently reported on the possible reasons for this recent growth in US manufacturing output. One driving factor is a strong increase in orders for plastics and metals, as U.S. industries begin to recover and ramp up production once more. Auto sales have also recovered to some extent following a recent sales slump, and businesses are beginning to gain the confidence they need to invest in new equipment.

Although there are a few clear leading industries in the U.S. manufacturing recovery, almost all industries are contributing to the expansion. Bradley Holcomb of the Institute for Supply Management described the manufacturing growth as "so broad-based." Along with the strong performance of the auto sector, the building industry is also driving the expansion, following a growth in spending on construction projects of 1.8 percent in July. This is the biggest increase in construction spending for more than two years. Computer sales are also very strong, with corporate spending leading the way.

New technologies, most notably 3D printing, are also enabling the U.S. manufacturing sector to expand. In recent years, the technology has moved on from prototype printers with limited capabilities to 3D printing machines that can actually play a useful role in product development and the creation of customized products.

In order to sustain this recovery, wages in the United States need to continue to rise. This would allow consumers to make large household purchases, including not just automobiles, but also household appliances and electronic goods. According to Brian Jones, a senior economist from New York, increased wages lead to increased spending. He painted a positive picture of the nation's economic outlook, describing the U.S. manufacturing sector as being "on fire" in light of the August figures.

The U.S. manufacturing sector is faring much better than sectors in other countries. While U.S. manufacturing expanded in August, manufacturing growth slowed down in the United Kingdom. Other European nations are also struggling, thanks to the difficult political situation in Ukraine, among other factors. According to Bradley Holcomb, the problems experienced by Europe don't currently seem to be holding back U.S. manufacturing, although that could change if the geopolitical issues become even more serious.

August's boom in U.S. manufacturing is good news for the American economy, which seems to be showing signs of recovery. In order to maintain the growth in the manufacturing sector, wages need to continue to rise to keep the demand for goods high.

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