nytimes.com
September 2, 2003
Manufacturing Activity Expands in August
By THE ASSOCIATED PRESS
Filed at 10:29 a.m. ET
NEW YORK (AP) -- Activity in the manufacturing sector expanded strongly in August for a second straight month, suggesting the start of recovery in this lagging sector.
The Institute for Supply Management reported that its manufacturing index rose to 54.7 last month from 51.8 in July. A reading above 50 indicates expansion, while one below 50 indicates that manufacturing activity is slowing.
The index in August was at its highest level since a 55.2 reading last December.
Norbert J. Ore, who oversees the index for the ISM, said the numbers were encouraging.
``Though two months of growth do not establish a trend, there is strength in the various segments of this report that we have not seen for some time,'' Ore said in a statement accompanying the report.
He noted that new orders and production have both had readings above 50 percent for four consecutive months, suggesting that ``the continuation of a second half recovery appears on track.''
The August reading was stronger than the 53 that analysts had been expecting.
The index, which is based on a survey of managers who buy raw materials in 20 industries, is closely watched as a measure of the health of the nation's manufacturing sector.
Manufacturing has been slower to recover than other sectors from the last recession, but in recent months it has been showing some renewed strength. The Commerce Department reported last month that orders for U.S. factory goods rose a solid 1.7 percent in June, the second consecutive monthly gain.
Several numbers in the ISM report for August suggested further strength in coming months.
The backlog of orders and new export orders improved, as did supplier deliveries. Still, employment continued to decline.
The closely watched production index rose to 61.6 in August from 53.3 in July.
``The surge in August production is very positive for the manufacturing sector,'' said Ore, who is also director of sourcing and procurement at Georgia-Pacific Corp., a major paper manufacturer. ``The production index is the highest that it has been since June 1999, when it also registered 61.6 percent.''
Of the 20 industries covered in the report, 13 reported growth, including leather, furniture, wood and wood products, apparel, electronic components, printing, chemicals, fabricated metals and glass and stone. |
