A worker inspected a truck at the Volvo manufacturing plant in Dublin, Va. Increases in orders, employment, and exports helped US manufacturers last month.
(Steve Helber/ Associated Press/ File 2011)
Manufacturing picks up the pace in Feb.
Industry gauge shows most growth since ’04
A worker inspected a truck at the Volvo manufacturing plant in Dublin, Va. Increases in orders, employment, and exports helped US manufacturers last month.
(Steve Helber/ Associated Press/ File 2011)
WASHINGTON — Manufacturing in the United States grew in February at the fastest pace in almost seven years, driven by gains in orders, employment, and exports that signal factories will continue to propel the expansion.
The Institute for Supply Management’s factory index increased to 61.4, exceeding the median forecast of economists surveyed by Bloomberg News and the highest level since May 2004. Readings greater than 50 signal growth.
Compared with similar measures released in Europe and Asia, the data put the United States at the forefront of the global manufacturing rebound.
Business investment in new equipment is prompting companies like Eaton Corp. and Deere & Co. to raise profit forecasts as growth picks up worldwide.
“Manufacturing is booming,’’ said Dean Maki, chief US economist at Barclays Capital Inc. “Corporate profits continue to grow at a rapid pace, and that is providing significant fuel for gains in business investment.’’
A gauge of factories in the euro region rose to 59 last month, the highest since June 2000, from 57.3 in January, London-based Markit Economics said.
In China, the Purchasing Managers’ Index dropped for a third month. The gauge fell to 52.2 from a January reading of 52.9, the China Federation of Logistics and Purchasing said on its website. In contrast, India’s manufacturing grew at the quickest pace in three months, rising to 57.9, according to a survey by HSBC and Markit Economics.
The ISM’s order gauge climbed to the highest level since January 2004 and its employment measure reached a 38-year high. Exports accelerated at the fastest pace since December 1988, and the gauge of prices paid increased to a seven-year high.
Norbert Ore, chairman of the ISM’s manufacturing committee, said in a press conference that the jump in prices was the only “big negative’’ in what was otherwise “another great month’’ for US factories. The increases in commodities like steel and oil are hurting profits, which may cause some companies to pass the costs on to customers, he said.
Another report yesterday showed construction spending fell more than forecast in January, paced by the biggest slump in commercial projects in 17 years.
In 2010, US gross domestic product increased 2.8 percent, the most in five years.
“The numbers coming out of the US for GDP and industrial production are pretty solid, but we have an issue with regard to employment,’’ said James Meil, chief economist at Eaton.
A Labor Department report on Friday may show the US jobless rate increased to 9.1 percent from 9 percent.
© Copyright 2011 Globe Newspaper Company.
