Increase in Midwest manufacturing in February

After four consecutive months of upward mobility in Midwestern manufacturing, February saw a 0.8% increase following a revised 0.4% raise in January, according to the latest Chicago Fed Midwest Manufacturing Index (CFMMI). This could be a strong indicator of economic recovery for the Midwest, which has fared better than other regions of the U.S. in the past few months. Expanding firms may want to seek out manufacturing recruiters to help find talent to fill new opportunities. 

Increases and decreases by sector
Production levels in February were a seasonally adjusted 96.3. The index's benchmark is 100, which is based on 2007 production levels, so the current reading is approaching a pre-recession position.

There was an increase in production for three of the region's four manufacturing sectors: regional machinery production increased 1.7 percent, regional steel output rose 1.6 percent and regional resource sector output improved by 0.5 percent. These increases are larger than the national improvements in manufacturing production. The five sub-sectors of resource manufacturing (wood, paper, chemical, food and nonmetallic mineral) all saw an increase from January to February. The entire Midwestern manufacturing industry grew by 5.9 percent from the year before. 

Surprisingly, the only regional sector that saw a decrease in production in February was auto, traditionally a driving force for Midwestern manufacturing, falling by 0.1 percent. Automotive production increased 1.9 percent in January. However, overall auto production was up 12.4 percent compared to February 2012. The CFMMI tracks production levels in the Seventh Federal Reserve District, which includes Iowa and most of Michigan, Illinois, Indiana and Wisconsin. This region produces 30 percent of U.S. light vehicles, according to Dow Jones Business News. 

Production growth despite looming sequester
National manufacturing has been on the rise as well, though it has not increased as much as the Midwest's industry. Production levels rose nationally in February, despite worries the government sequester would damage purchasing.

"Manufacturing has been leading the recovery," Gus Faucher, a senior economist at PNC Financial Services Group told Bloomberg. "That's good news for the labor market, it's good news for wages, it's good news for consumer spending."

The additional output will promote growth, according to the source. The increase in manufacturing may help the U.S. economy deal with difficulties related to consumer confidence such as federal budget cuts, new payroll taxes and higher gasoline prices. Working with a manufacturing recruiter can be beneficial to growing firms who want to attract the best talent.