Domestic manufacturing production increases in August

Domestic manufacturing output increased in August, showing signs of growth that may continue for the rest of the year, according to Reuters.

The Federal Reserve Bank said manufacturing production moved up 0.7 percent in August after declining 0.4 percent the month before. Despite the slow momentum for growth, economists and producers are optimistic about the industry's outlook for the second half of the year.

"Growth in the manufacturing sector is picking up and will run faster over the balance of the year than has been the case in recent months," said John Ryding, chief economist at RDQ Economics.

Ted Wieseman, economist at Morgan Stanley, said the periods of growth seen in the Institute Supply Management's index of manufacturing activity for May and increased manufacturing output in August are good signs that the industry has gotten over its spring production slump.

In addition to increased output, the number of shipments have also expanded to their highest level seen in more than a year.

Industrial output saw an overall growth of 0.4 percent in August with auto manufacturers increasing their production, The Wall Street Journal reported. This rise in output is the result of stabilized consumer spending in the U.S. as well as production expansion abroad.

With this slight increase, production capacity gained 0.2 percent to 77.8 percent, which fell within economists' projections. Experts predict manufacturing growth to continue slowly for the rest of 2013, as long as producers their maintain or reduce manufacturing costs

"At the current stage, prospects for activity are less clouded and the modest upward trend might continue going forward," said Annalisa Piazza, economist at Newedge Strategy.

Auto manufacturing led the output expansion with motor vehicle and parts production rising 5.2 percent in August, a huge recovery after dropping 4.5 percent in July. Other manufacturing sectors also saw increases in production of more than 1 percent, including for wood products, computers and electronics and appliances.

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