Factory construction boosts economy

U.S. economy grew at 4.6 percent rate in Q2 thanks in part to a 12.6 percent surge in factory projects.

After years of factory closings shrank the nation's industrial footprint, a mini-boom in plant construction is beginning to reverse the trend and fuel faster economic growth.

A 12.6% surge in spending on non-residential structures — notably new and expanding factories — was a big reason for last week's upward revision of second quarter economic growth. The Commerce Department said the economy expanded at a 4.6% annual rate, up from its previous 4.2% estimate and the strongest growth in 2 ½ years.

An auto sales boom, the housing recovery and the oil and natural gas drilling frenzy are all forcing manufacturers to build or enlarge plants to supply these industries. Factory output is up 3.2% so far this year after rising 2.6% in 2013.

"Manufacturers are relatively upbeat about the next few months and that's really playing into increased investment," says Chad Moutray, chief economist of the National Association of Manufacturers.

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Source : USA Today