US Factory Production Stays Flat in November as EV Sector Weighs

Manufacturing Output Shows No Growth

US factory production remained unchanged in November, continuing the mixed signals in the manufacturing sector. The Federal Reserve's manufacturing data showed that production was flat month-over-month, following a 0.4% decline in October. This stability was somewhat expected, as economists surveyed by Reuters had predicted a stable reading.

Motor Vehicle Production Declines

The main factor contributing to the stagnation was a 1.0% decrease in motor vehicle production in November, following a more significant 5.1% drop in October. The decline was largely attributed to the expiration of electric vehicle tax credits on September 30, 2025, which led to a surge in vehicle purchases during the third quarter as consumers rushed to buy before the deadline.

Annual Production Growth

Despite the monthly stagnation, US factory production showed positive growth on an annual basis, rising by 1.9% in November. This year-over-year increase indicates that while the manufacturing sector faces challenges, it remains on a growth trajectory.

Impact of Government Shutdown

The release of the manufacturing data was delayed due to the 43-day federal government shutdown, which affected various economic data releases. The delay highlighted the broader impacts of government operations on economic reporting and analysis.

Market Implications

The flat production numbers, particularly the decline in motor vehicle manufacturing, reflect the complex dynamics affecting the US manufacturing sector. The end of tax credits for electric vehicles has had a noticeable impact, potentially signaling a slowdown in the EV market unless further incentives are introduced.