Report: Manufacturing Reaches Two-Year High
Manufacturing is poised to make a bigger contribution to the U.S. expansion after a factory barometer unexpectedly climbed in August to the highest level in more than two years.
Bloomberg reported that the Institute for Supply Management’s index rose to 55.7 — the strongest since June 2011 — from 55.4 a month earlier, Readings above 50 indicate growth. The median forecast in a Bloomberg survey of economists was 54.
American producers are leading a global manufacturing recovery that stretches from China to Europe as their economies improve. Resilient U.S. demand for motor vehicles is prompting companies such as Ford Motor Co. to expand, while further strides in construction are bolstering orders for building materials, appliances and furniture.
“It’s going to be a solid quarter for U.S. manufacturing,” said Brian Jones, a senior economist in New York at Societe Generale, who projected a reading of 55.8. “Businesses are expanding production not only to meet demand but to also build inventories. Manufacturing worldwide is impressing to the high side.”
Another report showed construction spending increased in July to the highest level in four years. Outlays climbed 0.6% to a $900.8 billion annual rate, the strongest since June 2009, after little change in June, the Commerce Department said.
Estimates for the ISM factory index from 85 economists in the Bloomberg survey ranged from 51 to 55.8. Manufacturing accounts for about 12 percent of the economy.