US Manufacturing Faces Downturn: Causes and Implications of the Current Recession

All industries progress through boom and bust cycles, and the manufacturing industry in the United States is currently shifting downward. According to n...

All industries progress through boom and bust cycles, and the manufacturing industry in the United States is currently shifting downward. According to new regional index reports this week, manufacturing is down across the board in the US—all seven regional manufacturing purchasing manager’s indexes reported contraction. In other words, the industry is in a recession.

As Business Insider reports, this can be attributed to three key factors: a weakened energy sector, a decrease in investments from the mining sector, and a decreased demand from China that has lessened revenue from international trade. This decrease in demand in part has led to manufacturing outpacing sales.

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The report consults with expert analysts who note that this contraction is not a fluke and is likely to continue in the near future:

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But due to the industry’s cyclical nature, while the recession may be drawn out it will not last forever. Renaissance Macro analyst Neil Dutta told Business Insider that the industry will strengthen once again with time and with the upswing of trade:

[SOURCE: Business Insider]