One bright spot in otherwise lackluster US industrial production figures: defense and space equipment, which rose last month to a record high.
(Bloomberg) — One bright spot in otherwise lackluster US industrial production figures: defense and space equipment, which rose last month to a record high.
The index in June surpassed its previous peak registered in December 2019, according to data published Tuesday by the Federal Reserve. It’s up 3% over the last two months alone, while the index of overall industrial production has fallen 1% over the same period.
The war in Ukraine has contributed to a humming US defense industry. Not only is it cranking out weapons to be sent to the battlefield, but also boosting production of everything from bullets to vehicles and drones to supply Ukrainian needs and replenish US stockpiles.
Higher production also coincides with the federal government’s third quarter, when the Pentagon — usually by then freed from budget stalemates in Washington which result in stopgap funding — plans ramp-ups in production and manufacturing, as well as new-program starts.
Increased federal defense spending over the last year has been helping to prop up a slowing US economy, according to recent quarterly figures on gross domestic product. Tuesday’s industrial production data suggest that support may continue in the coming quarters.
Read More: US Industrial Production Decreased in June for a Second Month
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