US Manufacturing Growing At Fastest Rate In 14 Years

11 Sep

Colton Hveem

American manufacturing has entered into a revitalized industrial revolution. Investment is pouring into production on the home front at record levels. The Institute for Supply Management (ISM) tracks levels of investment into manufacturing within the states. By their analysis, investment into US based production facilities has reached a 14 year high.

The graph shows the varying levels of investment into manufacturing within the country. Altogether zero growth is represented by 50 percent, as any investment that takes place is counteracted by factory closures or otherwise negative influences on overall production. As one can see by the graph, investment has steadily increased since Trump was elected and obtained the presidency.

ISM reports that its manufacturing index spiked to 61.3% in August, levels not seen since the year 2004. This is over a 3% increase from 58.1% reported for July. Nearly every industry that ISM follows saw growth last month. “Some 16 of the 18 industries tracked by ISM reported expanding in August,” marketwatch reports. This equates to a near perfect economic production scorecard. The only thing that could be achieved further is a faster rate of an already stable growth from nearly every production industry.

The ISM is rather reliable indicator of the strength of the economy. Marketwatch notes, “the ISM index is compiled from a survey of executives who order raw materials and other supplies for their companies. The gauge tends to rise of fall in tandem with the health of the economy.”

Companies are placing new orders at an even more impressive rate, growing to 65.1% on the ISM index, suggesting that plans for continued productivity are taking place. Simultaneously, the employment gauge rose to 58.5% in August, up 2 points from last month.

Expanding companies naturally correlates with job creation and in turn low unemployment. Unemployment rates dropped to 3.9% in July which is the lowest number in decades. With the ISM index reporting where it is, August unemployment rates could be even lower. “Unemployment figures for August 2018 will be released on Friday, September 7, 2018,” according to the National Conference of State Legislators. This hypothesis of even lower unemployment rates will thus be put to the test in a few short days.

Colton Hveem

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