US manufacturing activity hits 2004 high
WASHINGTON — US manufacturing grew for the 19th straight month in February as a jump in employment and production drove activity to a nearly six-year high, a key industry survey showed Tuesday.
The Institute of Supply Management said its Purchasing Managers Index rose to 61.4 percent from January’s reading of 60.8 percent.
The February PMI reading was the highest since May 2004, the ISM said in a statement. A reading above 50 percent indicates expansion.
“New orders and production, driven by strength in exports in particular, continue to drive the composite index,” Norbert Ore, head of the ISM manufacturing survey committee, said in the statement.
Production rose 2.8 percentage points, while new orders edged up 0.2 percent.
Employment also rose 2.8 percentage points, to 64.5 percent, climbing above 60 percent “for only the third time in the last decade,” Ore said.
While the survey found many positive indicators, Ore said supply executives also were concerned about “significant inflation of raw material costs across many commodities.”
Ian Shepherdson of High Frequency Economics said the slight rise in new orders was not a problem because the level “is so high we don’t need to see further gains in order to be bullish on manufacturing.”
“Clearly, the recovery in the sector is both robust and on track,” he added.
Manufacturing has been leading the US recovery that began in July 2009 from the worst recession since the Great Depression.
Nicholas Tenev at Barclays Capital said the “strong” ISM report backs up the improvement seen recently in regional manufacturing indices.
The continued surge in the employment index, he said, was “especially encouraging, as it suggests a growing consensus among manufacturers that the recovery is indeed sustainable and warrants expansion of payrolls.”