Thanks to the leadership of President Biden and Democrats, American manufacturing is back. U.S. factory output increased in May by more than forecast, and is expected to pick up even more steam in the months ahead.

The 0.9% increase followed a revised 0.1% decrease in April, Federal Reserve data showed Tuesday. Total industrial production, which also includes mining and utility output, climbed 0.8% in May after a revised 0.1% gain a month earlier.

The gain in factory output included a strong rebound in motor vehicle production and strength in machinery and chemicals. The median estimate in a Bloomberg survey of economists called for a 0.8% monthly increase in factory production and a 0.7% gain in industrial production.

Steady business investment, resilient consumer spending and a more recent pickup in export demand are all helping to fuel orders growth. When paired with a backdrop of lean inventories, factory output is poised to pick up steam in the months ahead.

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Growing Capacity
Total industrial production is nearing pre-pandemic levels — down less than 1.5% from February 2020 — but restrained capacity continues to limit faster output growth. Manufacturing capacity utilization, a measure of plant use, climbed to 75.6%, while total industrial capacity increased to 75.2%.

Production of motor vehicles rose 6.7% last month compared with 5.7% decrease a month earlier. U.S. automakers have been hit hard by a global chip shortage, resulting in plant shutdowns and lower output in some cases. Excluding autos and parts, manufacturing rose 0.5% after a 0.3% advance.

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