Manufacturing activity grew for 29th straight month

By Tiffany Hsu

Jan. 3, 2012 12 AM PT

Factory work expanded at its fastest pace in six months in December, continuing a growth trend that has lasted more than two years, according to a new report from the Institute of Supply Management.

The group’s manufacturing index rose to 53.9 from 52.7 in November. Any reading above 50 represents improvement in the sector.

Manufacturers said production, new orders and employment were all swelling last month while inventories and prices of raw materials were down. Industries including food and beverage, computers and electronics, and paper and textiles saw action pick up.

A measure of employment found an uptick in jobs for the 27th straight month, jumping to 55.1 from 51.8. In December, 23% of manufacturing employers said they added workers, while 19% said they slashed staff.

In November, 22% of factories took on new employees while 21% cut.

ISM said that its data correspond to a 4.5% boost in real gross domestic product, suggesting that the overall economy grew for the 31st month in a row.

Part of the boost may be linked to a more optimistic mood among Americans caught in the throes of holiday cheer. Last month, consumer confidence grew toward a post-recession high, according to the Conference Board.

And shoppers exercised that positive sentiment with their credit cards, helping retailers rake in $35.3 million online from Nov. 1 through Christmas – a 15% bump from the same period a year earlier, according to ComScore Inc.

Factory orders slip, service sector growing more slowly: reports

Consumer confidence up in December, nearing post-recession high