Los Angeles Times (MCT)
LOS ANGELES —
An index of U.S. manufacturing, seen by many as a major motivator of the recovery, touched a 10-month high in April.
A monthly index compiled by the Institute for Supply Management showed a 54.8 level, up 1.4 points from March in its 33rd straight month of growth.
The overall economy grew for the 35th straight month, according to ISM. Any reading above 50 shows expansion; below 50 indicates contraction.
Of the 18 industries measured by the ISM, factory activity grew at 16 of them, including for machinery, paper, transportation equipment, and petroleum and coal.
Surveyed companies said demand was stable to strong, though some said they were worried about high oil prices and questionable European stability.
Another index measuring new manufacturing orders came in at 58.2 — a 3.7-point improvement on March and a 12-month high. Demand for durable goods was up across the board for the first time since December 2010.
A gauge of employment also grew faster, up 1.2 points to a 10-month high of 57.3 in April.
Daniel J. Meckstroth, chief economist with the Manufacturers Alliance for Productivity and Innovation, said that although consumers are “income-constrained and deleveraging,” they need to replace durable goods that are at the end of their shelf life. Demand is particularly high for autos, he said.
“Furthermore, the construction cycle is turning positive and U.S. exports of manufactured goods are globally competitive,” he said in a statement. “Manufacturing is in the sweet spot of current demand.”
The sector, however, won’t be able to sustain its rate of growth, said Meckstroth, who predicted that expansion will continue at a slower speed for the rest of 2012.
A separate report Tuesday from the Commerce Department showed that construction spending in March grew 0.1 percent from the month before to $808.1 billion. That’s a 6 percent advance above the March 2011 level of $762.6 billion.
The data, which also shows improvements in private and residential construction, continues a run of housing reports that seem to suggest an improving market.