ISM: Manufacturing Expands in August

TEMPE, Ariz. (TheStreet) -- After a year and a half of contraction, manufacturing activity expanded in August, in yet another sign of economic recovery.

Today, the Institute for Supply Management said its index -- resulting from surveying purchasing executives around the country -- came to 52.9% in August, marking its highest reading since June 2007 and up from a 48.9 reading in July. An average of analysts surveyed by Thomson Reuters had expected the index to come to a less robust 50.5.

Business contraction is interpreted as a reading under 50, while a reading over that threshold signals manufacturing growth.

"The year-and-a-half decline in manufacturing output has come to an end, as 11 of 18 manufacturing industries are reporting growth when comparing August to July," ISM Chair Norbert Ore said in a statement. "While this is certainly a positive occurrence, we have to keep in mind that it is the beginning of a new cycle and that all industries are not yet participating in the growth."

Today's national figure followed yesterday's Midwestern showing, which also showed an uptick in manufacturing activity .

While growth in today's index was aided by a good showing in new orders, employment continues to be a lingering problem. For instance, on Friday Whirlpool(WHR Quote) announced plans to slash 1,100 jobs at an Indiana refrigerator plant.