Survey shows manufacturing activity grew in Sept. for 14th straight month, but at slower pace
By APFriday, October 1, 2010
Manufacturing activity up for 14th straight month
NEW YORK — Manufacturing activity expanded in September for the 14th straight month, although at the slowest pace since November.
The Institute for Supply Management said Friday that its manufacturing index read 54.4 in September, down from 56.3 in August. A reading above 50 indicates growth.
Meanwhile, manufacturing in China picked up last month. A survey affiliated with the government said its measure rose to 53.8 in September from 51.7 in August. China is the world’s No. 2 economy and a major supplier of goods to the U.S.
Strong growth in the industrial sector has helped lift the country out of the recession. Last month’s report was better than expected and triggered an explosive rally on Wall Street. That kicked off the best September for the stock market since 1939. The Dow Jones industrial average gained almost 8 percent for the month.
Signs of U.S. manufacturing activity slowing tempered the mood among investors Friday. The Dow Jones industrial average rose 29 points in midday trading.
The latest report said that companies increased production in September and were willing to hire workers to fill vacant positions.
But it also noted that there’s slower gains in new orders — a gauge of future business — and shrinking company backlogs. Each of those could hamper growth in the coming months.
“New orders are slowing almost to a crawl,” said BMO Capital Markets economist Sal Guatieri. “A lot of the temporary support is fading.”
Beginning last summer, factories revved up production because of strong demand from businesses that needed to replenish the stockpiles of goods that had dwindled during the financial crisis. That trend has slowed in recent months. Still, growth remains moderate for now, Guatieri said.
“Manufacturing has outpaced the rest of the economy in the recovery. Now it’s starting to look more like the rest of the economy,” said Norbert Ore, the chair of ISM’s manufacturing survey.
