The dog days of manufacturing

As I’m writing this in mid-July, we’re experiencing uncomfortably hot and muggy weather in the Chicago area. I worked up a sweat just walking the dogs this morning—and they walk pretty slowly. It’s hard to want to do much of anything.

That description seems to fit the U.S. economy in general and manufacturing in particular. After a few years of solid growth in recovery from the Great Recession, manufacturing seems to be stalled, not going forward or back. Erik Johnson, senior U.S. economist for IHS Global Insight, probably said it best in his report, “Manufacturing Goes Nowhere in the Second Quarter.”

While total industrial production was up 0.3 percent and manufacturing also rose 0.3 percent in June compared to May, it was barely perceptible, Johnson wrote. “In level terms, industrial production is on par with March, while manufacturing activity is below that of February,” when U.S. manufacturing expansion was at its highest level since June 2011.

In other words, we’re stuck in neutral. “After an annualized 5.1 percent surge in the first quarter, manufacturing declined by 0.2 percent in the second,” Johnson stated. “Strong headwinds, including the sequester and growth issues in both Europe and China, have made it difficult for the recovery to gain momentum. The manufacturing revival should continue to be a measured one, and though we do expect a second-half rebound, we foresee annual growth in the sector of about 2.5 percent—which would be the slowest pace since the recession.”

So, there’s not much to get excited about in terms of production. How about employment? Is manufacturing creating more jobs, as it has for the past few years? Not lately. The U.S. manufacturing sector lost 6,000 jobs in June, according to the U.S. Bureau of Labor Statistics.