U.S. factory production rose modestly in September, marking a partial recovery after a decline in August, the Federal Reserve reported Friday. Manufacturing output increased by 0.3 percent last month, following a revised 0.2 percent decrease in August. This gain was consistent with economists’ forecasts. On a year-over-year basis, factory production grew 1.1 percent in September.

Despite the recent rebound, manufacturing lost significant momentum over the third quarter, affected in part by complications related to the ongoing conflict in the Middle East. These disruptions have contributed to supply chain challenges and elevated energy prices, weighing on factory activity.

Manufacturing represents approximately 9.4 percent of the U.S. economy. While sectors such as artificial intelligence infrastructure development and inventory rebuilding to meet sustained domestic demand have provided support for production, several factors continue to pose risks. Higher energy costs, ongoing trade frictions with Canada, and increasing borrowing expenses are among the challenges that may limit growth in the manufacturing sector going forward.