Latest Economic Reports Suggest Robust Recovery
U.S. manufacturing rose in March as firms boosted production to meet the strongest demand in nearly 15 years while construction spending jumped in February, two separate reports said Monday, bolstering forecasts for robust first-quarter economic growth.
The Institute for Supply Management’s monthly purchasing managers’ index rose in March to 55.6, the highest level since February 2000 and its second straight month of growth.
That was up from 54.7 in February and beat forecasts for the index to remain unchanged.
Through January this year the manufacturing sector, which makes up one-sixth of U.S. economic activity, suffered an 18-month contraction, its worst since the 1990-91 recession.
“The manufacturing sector is coming back very nicely,” said Alan Ruskin, research director at 4Cast Ltd., an economic consulting firm.
Any figure above 50 in the index suggests growth; a reading below 50 indicates declining activity.
Despite the rise in activity, the ISM report also indicated that factories were continuing to shed employees as they have since mid-2000, while prices spiked higher after the recent run-up in commodity prices to eight-month peaks.
Firms slashing inventories at a record pace helped to shove the economy into recession starting in March last year.
But with shelves now nearly bare and demand solid, factories have had to boost production to restock goods this year, giving economic growth a hefty kick.
A separate report from the Commerce Department said construction spending jumped 1.1% in February--the strongest pace since February 2001--in a report that showed the building and housing sectors remain solid because of low interest rates and lean supply of new homes.
The value of new construction in the United States rose to $879.4billion in February from a downwardly revised $869.7 billion in January, the Commerce Department said. Construction spending climbed 1.2% over February 2001.
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Business Improving
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Construction Spending
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