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American manufacturing treads water amid slowing global economy

By Religare

Factory output in the US fell last month as Super Storm Sandydisrupted production even as American factories reel under weakeningglobal demand and slowing business spending, darkening the outlook forthe world's largest economy.

Factory output fell 0.9 per cent in October 2012 but was flat whenexcluding the effects of the storm, the Federal Reserve said in areport on Friday.

Meanwhile, industrial output in the US fell by 0.4 per cent in October2012 from the previous month, when it rose 0.2 per cent.


Super Storm Sandy which struck the US Eastern coast recently, led toshutdown of power, derailed transport and hit infrastructure,disrupting operations at factories, limiting factory output.

At the same time, American factories are facing a challengingoperating environment as a slowing global economy and a fiscal squeezethreatens to curb demand.

The global economic slowdown is taking a severe toll on Americanmanufacturers as the deepening debt crises in Europe and slowdown inemerging markets such as China and India squeezes overseas demand ofcompanies.

With possible tax hikes and spending cuts on the horizon, businessesin the US are rolling back spending, adding to the woes of Americanfactories.

At the same time, a pickup in household spending and a rebound in theAmerican housing market are likely to support struggling Americanfactories

Story first published: Monday, November 19, 2012, 12:30 [IST]
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