Ahead of the Bell: Manufacturing survey
WASHINGTON—U.S. factories likely expanded at the fastest pace in eight months through February as manufacturers cranked out more autos, steel and machinery.
Economists forecast that the Institute for Supply Management's manufacturing index rose last month to 55, according to a survey by FactSet. That would be the highest reading since June. Readings above 50 indicate expansion.
The private trade group of purchasing managers will release the report at 10 a.m. Eastern on Thursday.
Consumers are spending more on long-lasting goods, snapping up cars, appliances and computers. Auto sales have rebounded strongly from the spring, when Japan's earthquake and tsunami interrupted supply chains and fewer cars were available on dealer lots.
Businesses stepped up spending on industrial machinery and other capital goods last year, partly to take advantage of an investment tax credit. Orders for those goods slipped in January after the tax credit expired. But most economists expect demand for industrial goods to keep growing this year.
Manufacturing has been a key source of economic growth since the recession ended in June 2009. The sector has expanded for 30 straight months, according to the ISM's index.
Industrial output jumped in January, the Federal Reserve said, after rising by the most in five years in December. And manufacturing expanded in all 12 of the Federal Reserve's bank districts, the Fed said in a separate report Wednesday.
Auto manufacturing, steel makers and other metal producers all reported solid growth, the central bank said. At the same time, some manufacturers expressed concerns that Europe's financial crisis and slowing economy could cut into their exports this year.
More hiring is helping to increase consumer spending and economic growth. The economy is likely to expand by about 2.5 percent this year, according to a survey by the National Association of Business Economics. That's up from 1.7 percent in 2011.
Manufacturers have been a big source of that hiring. The sector accounts for only about 9 percent of total payrolls but added 13 percent of the new jobs last year. In January, they accounted for one-fifth of the 243,000 net jobs added.