April manufacturing production surged 0.6%, exceeding forecasts, but supply risks from Middle East tensions cloud the outlook.
U.S. manufacturing production climbed 0.6% in April, the strongest gain since February 2025, driven by motor vehicle output and AI-related technology demand. The increase followed an upwardly revised 0.1% rise in March, outpacing economists’ expectations of a 0.2% rebound.
The Federal Reserve’s data highlighted resilience in factory activity, though supply chain disruptions from the U.S.-Israeli conflict with Iran have strained deliveries. A New York Fed survey showed supplier performance in the state deteriorated in May, while producer prices accelerated at the fastest pace in four years.
Oil prices jumped Friday after geopolitical tensions escalated, further pressuring global supply chains. Analysts noted firmer demand but warned of downside risks to near-term manufacturing growth due to persistent supply and pricing uncertainties.