U.S. Manufacturing Reaches Highest Peak in Two Years

Over the past few months, economists and executives have waited with their fingers crossed tightly while monitoring the state of manufacturing in the U.S. As the manufacturing economy continues to stabilize after a stretch of decline, there has been some concern about the direction that it would head in during the second half of 2013.

This concern comes following recent market trends of reduced government spending and a weak global demand for U.S. products. Economists received a pleasant surprise, however, when the Institute for Supply Management claimed that the index of national factory activity rose to 56.2 for the month of September, up a half a point from 55.7 in August. This is the highest rating that U.S. manufacturing has experienced since August, 2011.

While the forward looking index fell from 60.5 to 63.2, further signs of encouragement can be seen in employment, which rose from 53.3 percent in August to 55.4 percent in September. This comes following the creation of 180,000 new jobs in September, and the hiring of 169,000 new employees in August. This growth in employment is steadily contributing to the rise in U.S. manufacturing.

As the index of national factory activity rates manufacturing economies on a 100 point scale, 50 is the benchmark that indicates whether or not an economy is growing or declining. While there is still a long way to go before manufacturing is declared completely stable, economists can take a deep breath knowing that right now it is moving in a positive direction.

With the overall growth of manufacturing increasing, this also means that competition is expanding as well. Product quality and consistency must therefore be of the highest priority to ensure that companies do not lose business to competitors. Failure to incorporate important technologies such as statistical process control software, cloud and mobile could provide competitors with an edge. 

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