US manufacturing is experiencing a significant uptick, with labor productivity rising by 3.6% and output climbing 3.3% in 2025. This growth is supported by a 6.7% increase in orders for core capital goods, excluding defense and aircraft, in the first three months of the year. the inventory-to-sales ratio also improved, falling to 1.51 in March, indicating a healthy balance between supply and demand.

Labor Productivity and Output Gains

According to the report, manufacturing labor productivity jumped by 3.6% in 2025, with a strong performance in February dsepite an overall negative payroll change. Output climbed by 3.3%, marking a turnaround from the weakness observed in 2024. This improvement is attributed to increased capital investment and efficiency, which have led to a resurgence in manufacturing employment.

Core Capital Goods Orders and Turbine Growth

The report highlights a significant 6.7% rise in orders for core capital goods, excluding defense and aircraft, in the first three months of 2025. Turbine orders, in particular, showed substantial growth. This surge in orders is a key indicator of the manufacturing sector's robust demand and investment attractiveness.

Inventory-to-Sales Ratio and Price Trends

The inventory-to-sales ratio in March fell to 1.51, a decrease from February and a year ago, according to the report. this improvement suggests a better alignment beetween inventory levels and sales.. additionally, prices for switching board and industrial control equipment for intermediate demand are up 12.1% from last year, while computer storage devices prices have risen by 20.2%. capital equipment prices for manufacturing are up 5.2%, reflecting the impact of booming demand.

Inflation in Capital Equipment Prices

The article notes that the 'inflation' in capital equipment prices is not consumer inflation but a result of booming demand, indicating a healthy and growing industry.. This price increase is attracting increased investment, further fueling the manufacturing boom.