U.S. manufacturing cranking into higher gear, new report indicates

An autoworker installs a dashboard at Ford's Michigan Assembly Plant.
(Mira Oberman / AFP/Getty Images)

WASHINGTON -- The American manufacturing industry appears to be getting back some of its mojo.

After slumping in the spring, a key measure of U.S. factory activity increased for the sixth straight month in November, reaching its highest level in 2 1/2 years.

In a report Monday, the closely followed ISM manufacturing index increased to 57.3, from 56.4 in October, driven by sizable gains in employment, new orders and exports. The latest overall reading reached its best level since April 2011 and was well ahead of analysts’ average forecast for a drop to about 55 in November.


Some economists see the ISM report as overstating the rebound in manufacturing; other measures of industrial production and sales have been less glowing. But most of the indicators point to a generally improving trend for American manufacturing, which could give a good boost to U.S. economic and employment growth.

Manufacturing led the economy out of the Great Recession and helped fuel the jobs recovery that began in 2010, but with Europe’s economy on the ropes and U.S. growth slogging along at a slow pace, factories have been relatively quiet over the last year.

Hiring at factories has picked up since the summer, and the jump in the employment component of the latest ISM index suggests that manufacturing payrolls could show a surprisingly strong gain when the November jobs report is released Friday. Car makers and producers of furniture and food products had solid job gains in the October report, but computer and electronics manufacturers trimmed their payrolls.

Heading into the new year, manufacturers in the U.S. and around the world are looking better, with a reviving Europe, improvements in Japan and a firming of China’s economy. U.S. economic growth is expected to accelerate next year as well, but recent weakness in corporate capital spending, perhaps stemming partly from federal policy uncertainties, could restrain American manufacturing activity.


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