Why manufacturing growth effect everyone?

Manufacturing multiplier chart

 

Based on US Bureau of Economic Analysis, Manufacturing has the biggest multiplier effect, which means it effects all markets including housing and service industry. The chart here explains some numbers about different industries.

July data signaled a sustained rebound in production volumes across the manufacturing sector. Higher levels of output have been recorded in each of the past two months, with the latest expansion the fastest since November 2015. Anecdotal evidence cited greater inflows of new work and supportive economic conditions New business growth continued to recover from May’s post-crisis low, with the latest improvement in new order books the strongest for nine months.At the same time, export sales increased at a modest pace in July, which manufacturers linked to successful promotional initiatives and entry into new markets. Rising workloads in turn contributed to an accumulation of unfinished business for the second month running.

Payroll numbers increased in July, which continued the upward trend recorded over the past three years. Moreover, the rate of job creation picked up to its strongest since July 2015. Manufacturers noted that faster new business growth and the launch of new products were key factors boosting staff recruitment at their plants.

Meanwhile, higher levels of incoming new work also resulted in greater volumes of purchasing activity during July. Input buying has now risen for three months running and the latest expansion was the steepest since October 2015. However, manufacturers remained cautious in terms of their inventory holdings, with stocks of finished goods and pre-production inventories both falling since the previous month. source: Markit | Joana Ferreira | 8/1/2016