This is Mary Walden with economist MW, welcoming you to the economic perspective. Today’s program asks if manufacturing is still a leading indicator. Mike, all eyes are focused on the economy and looking for signs of a potential recession. One troubling indicator is manufacturing. Production from our nation’s factories has been dropping for several months. In the past such a trend was a good forecast of an impending recession. Is this still the case?
- No – because manufacturing has been dropping as a % of the economy
- Nationally, down to 11%, a full percentage point under a decade ago, and half of a generation ago
- Not because factories are making less – output is as high as ever
- Because the rest of the economy has grown faster, particularly services
- So economists are putting more emphasis on activity in the non-manufacturing part of the economy
- And while manufacturing output has been falling, non-manufacturing activity is still rising, albeit more slowly
- So one reason why many still don’t yet see a recession in the near future
- I’m MW
And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.