U.S. Manufacturing Output Dips in August Amid Major Factory
Federal Reserve data shows a 0.3% drop in manufacturing output for August, breaking a seven-month growth streak.
U.S. Manufacturing output decreased 0.3% in August, ending seven consecutive months of growth, according to the Federal Reserve. The output of durable goods manufacturing declined by 0.5%, while nondurable manufacturing held steady.
Industrial production overall remained flat for the month. The Federal Reserve also reported that capacity utilization was unchanged at 76.3%, a figure it notes is 3.1 percentage points below its long-run average.
Manufacturing Technology Orders
New orders for manufacturing technology, a key indicator of capital investment, totaled $605.8 million in July. The Association for Manufacturing Technology reported this marks the fifth straight month orders have exceeded $500 million, a pattern only seen once before since 1998.
Year-to-date orders from January through July 2026 reached $4.03 billion, a 37.1% increase over the same period last year. The trade group attributed a sequential decline from June to July 2026 to reduced investment in several industries, particularly makers of engines, turbines, and power transmission equipment.
Some sectors showed strength. Manufacturers in forging and stamping increased orders to their highest level since December 2012. From June to July 2026, the value of orders from contract machine shops declined by only 1.3%, and the number of units ordered increased by over 2%, indicating a growing need for additional manufacturing capacity, AMT said.
Major Factory Investments Announced
This week saw several significant capital expenditure announcements from manufacturers expanding their U.S. Footprints.
Hitachi Energy plans a $528 million expansion of its transformer plant in Gallman, Mississippi. The company stated this is its largest single U.S. Investment to date and will double both production capacity and the local workforce, creating over 700 jobs. Construction is slated to begin late this year, with production starting in 2029.
Reckitt, the health and hygiene company, announced investments of up to $600 million at two U.S. Sites. The funds will integrate commercial and R&D capabilities at a New Jersey campus and expand its largest over-the-counter drug manufacturing facility, located in North Carolina. The company said the expanded North Carolina plant will become the largest OTC manufacturing facility in the United States.
Other investments include a $10.3 million new factory for die-caster ArtiCast in Michigan, pledging 100 jobs, and a new $100 million pharmaceutical spray-drying facility opened by Hovione in New Jersey, which will employ about 80 workers. Turkey-based Assan Alüminyum, through its subsidiary Kibar Americas, also opened a new aluminum production plant in Fairmont, West Virginia, though the investment value was not disclosed.
Layoffs and Workforce Reductions
Despite the sector adding 16,000 jobs in August, several manufacturers have filed Worker Adjustment and Retraining Notification (WARN) Acts indicating layoffs.
As of September 18, ready-to-eat meals maker Wonder Group announced the most layoffs, with 533 jobs cut as it closes two facilities in Parsippany, New Jersey. Sapporo's U.S. Subsidiary is closing three plants in Escondido, California, affecting 212 employees, according to state reports.
The Labor Department reported that unemployment insurance claims for the week of September 12 stood at 196,000, an increase of roughly 0.3% compared to the same week last year.
