U.S. manufacturing output increased in May and factory activity accelerated sharply, spurring hopes of a strong rebound in economic growth this quarter. This represented an increase in industrial output for the third time in four months, a indication that growth in the critical manufacturing sector is back on track following a challenging winter.
“The growth in manufacturing output and positive news from the home building industry are indications of a strengthening economy,” said Brian Gallagher, Director of Marketing for O’Neal, Inc., an integrated engineering and construction firm specializing in design and building chemical, manufacturing, and pharmaceutical facilities.
Industrial production rose a seasonally adjusted 0.6% from April, according to the Federal Reserve. Capacity utilization, a closely watched gauge of slack, ticked up 0.2 percentage point to 79.1% in May.
Another bright spot was the National Association of Home Builders/Wells Fargo index of homebuilder confidence. That index rose four points to 49 in June, which was just shy of the threshold that would be considered favorable for building conditions. The improving sentiment bodes well for the housing recovery, which stalled last year after a run-up in mortgage rates.
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