As noted earlier, the U.S. economy grew by an annualized 1.1 percent in the first quarter, and the Bureau of Economic Analysis has now released data breaking out that growth by industry. In short, real value-added output in the manufacturing sector increased by 1.4 percent in the first quarter of 2016, slowing from 2.6 percent and 2.4 percent growth in the third and fourth quarters of 2015, respectively. As a result, manufacturers contributed 0.16 percentage points to headline growth in the first quarter, down from 0.31 percent and 0.29 percent in the prior two quarters.
Looking specifically at manufacturing in the first quarter, real value-added from nondurable goods firms rose 3.8 percent at the annual rate, but durable goods manufacturers saw output decline by 0.6 percent. Therefore, durable and nondurable goods businesses contributed -0.04 percent and 0.2 percent, respectively, to real GDP for the quarter.
Putting that figure in perspective, the largest contributors to real GDP growth in the first quarter were construction (0.36 percent), professional and business services (0.31 percent), health care and social assistance (0.28 percent) and retail trade (0.28 percent). In contrast, there were significant drags to growth from transportation and warehousing (-0.27 percent), mining (-0.15 percent) and utilities (-0.12 percent) in the first quarter.
ShopFloor is the blog of the National Association of Manufacturers (NAM).