ISM: Manufacturing Expands in August
TEMPE, Ariz. (
) -- 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) - Get Report
announced plans to slash 1,100 jobs at an Indiana refrigerator plant.
After the news, several manufacturing operations were mixed.
United States Steel
(X) - Get Report
and
Ford
(F) - Get Report
were up 0.5% each.
Kimberly-Clark
(KMB) - Get Report
and
Dow Chemical
(DOW) - Get Report
were sliding 0.7% and 0.5%, respectively.
-- Written by Sung Moss in New York
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