Manufacturing index rises for March
Manufacturing in the U.S. expanded at a faster pace than expected in March, as industry analysts are now suggesting that the sector is weathering slower global economic growth, Bloomberg News reported.
According to the news outlet, the Institute for Supply Management's (ISM) factory index rose to 53.4 last month from 52.4 in February. Readings of more than 50 signal growth in the sector, and the median forecast by economists surveyed by Bloomberg called for a gain to 53.
Production rose to a three-month high in the manufacturing sector, and the gauge of employment in the industry climbed to the highest level since June due to an adjustment of business strategy by many companies.
"Manufacturing is going to continue to help boost economic growth," Omair Sharif, an economist at RBS Securities LLC in Stamford, Connecticut, who correctly forecast the gain in the index, told Bloomberg. "We’ve got a bit of a slowdown globally that is affecting exports, but for the most part there’s pretty healthy demand for U.S.-made products."
According to the news outlet, the ISM's production index rose to 58.3 from 55.3, the new orders measure decreased from 54.9 to 54.5 and, perhaps most importantly, the employment gauge increased to 56.1 from 53.2.
The Associated Press reported that the manufacturing sector has added more than 100,000 jobs in the past three months, roughly one-seventh of all gains in the U.S. The gains were driven by greater consumer confidence and a rise in spending by businesses on automobiles, machinery and other goods.
MarketWatch reported that the U.S. manufacturing success was not mirrored by other countries, as the euro zone suffered and dropped to a three-month low. The positive news in the American sector was seen as something that could signify a future trend in the industry.
"Our customers are reporting a potential 10 percent to 13 percent increase in purchases for 2012," an executive at a company that makes heavy machinery told the news provider. "Actual orders continue to be slow to appear, but expectations continue to be high."
According to MarketWatch, the stagnation of other major world economies had initially generated concern among American manufacturers, but these companies were able to find customers in the emerging market countries that reported growth.