American manufacturing growth started outpacing the rest of the world's growth at the end of last year — for the first time in recent memory.
The big picture: The reasons for the surprising flip-flop are primarily energy and COVID-related, according to the Atlantic Council GeoEconomics Center.
- Production of renewable energy equipment saw a big uptick in the U.S. last year, and oil exports soared, too.
- Also: Domestic production of medical equipment like masks, gloves and pharmaceuticals grew.
Meanwhile, China’s manufacturing growth was muted because of its zero-COVID policies, while the eurozone’s production has been impacted by higher energy prices.
- “While the rest of the world grew a little, the US surged,” the Atlantic Council wrote.
Details: The chart shows the difference between the U.S. and the world's (excluding the U.S.) industrial production year-over-year percent change. The Atlantic Council calculations are based on data from the Federal Reserve Bank of Dallas.
What’s next: The Fed's rate-hiking campaign could still slow down manufacturing, as the WSJ reports.
- But, but, but: One potential tailwind is the Inflation Reduction Act's massive incentives for clean energy production — which haven’t even kicked in yet.