However, factors including higher energy prices and rising borrowing costs pose downside risks to production
Published Fri, Oct 16, 2026 · 10:53 PM
[WASHINGTON] US factory production increased in September, but lost considerable momentum in the third quarter amid headwinds from the Middle East conflict, which has snarled supply chains and raised energy prices.
Manufacturing output rebounded 0.3 per cent in September following a revised 0.2 per cent decline in August, the Federal Reserve said on Friday (Oct 16).
The rise was in line with economists’ expectations.
Factory production was previously estimated to have dropped 0.3 per cent in August. Output advanced 1.1 per cent on a year-over-year basis in September.
It grew at a 0.7 per cent annualised rate in the third quarter after accelerating at a 5.6 per cent pace in the second quarter.
Manufacturing accounts for about 9.4 per cent of the economy.
The Business Times turns 50
Five decades of milestones and moments that shaped Singapore’s success story - told through our headlines.
Explore BT50
While an artificial intelligence infrastructure build-out and businesses rebuilding inventories to meet robust domestic demand are supporting factory activity, higher energy prices, a trade war with Canada and rising borrowing costs pose downside risks to production.
Diesel prices have surged to a record high as the US-Israel war with Iran drags on, and economists said the economy could soon feel the effects through higher prices for goods, including at the supermarket, which could weigh on demand.
Durable goods manufacturing production edged up 0.1 per cent, lifted by gains in the output of primary metals, machinery and electrical equipment, appliances and components.
SEE ALSO
Production of motor vehicles and parts fell 3 per cent. Durable goods manufacturing output increased at a 3.8 per cent rate in the third quarter, partly boosted by a 28.4 per cent surge in the production of semiconductors and related electronic components related to the AI spending boom.
Non-durable manufacturing production rose 0.4 per cent over the month amid gains in printing and chemicals output. Non-durable manufacturing output, however, fell 1.6 per cent last quarter.
Mining production rose 0.2 per cent in September and grew at a 5 per cent rate in the July-to-September quarter. Utilities jumped 3.5 per cent amid demand for air-conditioning. Their output increased at a 14.8 per cent pace in the third quarter.
Overall industrial production rose 0.7 per cent in September after gaining 0.1 per cent in August. Industrial output increased 2.2 per cent year on year in September. It advanced at a 2.8 per cent pace in the third quarter after growing at a 4.8 per cent rate in the second quarter.
Capacity utilisation for the industrial sector, a measure of how fully companies are using their resources, rose to 76.9 per cent in September from 76.4 per cent in August.
It is 2.5 percentage points below its 1972-to-2025 average. The operating rate for the manufacturing sector edged up to 75.9 per cent from 75.8 per cent in August. It is 2.3 percentage points below its long-run average. REUTERS