To: Maurice Winn who wrote (15881 ) 3/1/2002 12:20:29 PM From: AC Flyer Respond to of 74559 Even the hard core doomsters won't be able to ignore reality much longer: >>Reuters Finance News Factories Snap 18-Month Slump in February Mar 1 10:44am ET By Daniel Sternoff NEW YORK (Reuters) - The U.S. manufacturing sector snapped out of its deepest slump in a decade in February as factories ramped up activity for the first time since July 2000 to meet a wave of new orders, an industry report showed on Friday. Adding to evidence the economy is recovering from recession, demand for manufactured goods surged in February, pushing factories to raise production even as they continued to whittle down inventories. The Institute for Supply Management's monthly Purchasing Managers Index rose to 54.7 in February from 49.9 in January , breaking above the 50 level and indicating expanding factory activity after 1-1/2 years of decline. "February signals the turnaround for manufacturing," said Norbert Ore, chairman of ISM's business survey committee. "Manufacturing has struggled and hopefully this signals the beginning of a strong recovery." The index was far stronger than the 50.9 reading economists had expected, and the surprising strength lifted the stock market and the dollar and sent U.S. bond prices tumbling. The report showed factories continued to shed jobs in February -- albeit at a slower pace -- indicating it will take time before a brighter economic outlook brings relief to manufacturing workers, who have been hard hit by the recession. "Despite the risks to the economy such as potential retrenchment by consumers or the whole question of high debt levels, you seem to have the ingredients for a self-reinforcing recovery ," said Carey Leahey, senior U.S. economist at Deutsche Bank Securities. The Employment Index rose to 43.8 percent in February, up from 42.6 percent in January. The New Orders Index, a barometer of demand for factory goods in the pipeline, jumped to 62.8 from 55.3 in January. The Production Index rose to 61.2 from 52.0 in January . The strength in orders and production outstripped drags on the sector from continued inventory liquidation and rising layoffs. The ISM inventories index fell to 39.5 in February from 40.5 . Manufacturers left plants idle for most of the past 18 months as they struggled to pare inventories left bloated by a collapse in business investment that triggered the recession. They continued that process in February, but with inventories now looking extremely slim and demand picking up more than expected, the outlook for the manufacturing sector is growing brighter. ISM's New Export Orders Index registered 51.1 percent, up from January's 50.8 percent .<<