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Business Title: U.S. Manufacturing Grows at Fastest Pace Since May '04; Europe, China Gain March 1 (Bloomberg) -- Manufacturing in the U.S. grew in February at the fastest pace since May 2004 as factories added workers and boosted production, indicating more momentum for the expansion. The Institute for Supply Management’s factory index increased to 61.4 from 60.8 in January, the Tempe, Arizona-based group said today. Readings greater than 50 signal growth. In Europe, manufacturing expanded at the fastest pace in more than 10 years, while the rate of growth at factories in China was the slowest in six months. Business investment in new equipment is prompting U.S. companies like Eaton Corp. and Deere & Co. to raise profit forecasts as the global economy picks up. The figures underscore Federal Reserve Chairman Ben S. Bernanke’s testimony to Congress today that the economic recovery this year will be ‘more rapid” than in 2010. “The fundamentals in the underlying economy still suggest further strengthening of economic activity as we go throughout the year,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. “The manufacturing sector has been experiencing an exceptionally strong rebound.” The median estimate called for an increase to 61, according to the Bloomberg survey of 77 economists. Forecasts ranged from 58.7 to 63.3. Oil Surges Stocks fell as crude oil prices gained amid concern protests in the Middle East and North Africa will disrupt supplies. The Standard & Poor’s 500 Index declined 0.4 percent to 1,321.61 at 10:43 a.m. in New York. Treasuries fell, pushing up the yield on the benchmark 10-year note to 3.46 percent from 3.43 percent late yesterday. Crude oil for April delivery jumped 1.8 percent to $98.69 a barrel. A separate report showed construction spending dropped more than forecast in January, paced by the biggest slump in commercial projects in 17 years, showing the industry will continue to be a laggard in the economic recovery. Construction spending fell 0.7 percent to a $791.8 billion annual rate, the lowest since August, the Commerce Department said. A gauge of factories in the euro region rose to 59 last month, the highest since June 2000, from 57.3 in January, London-based Markit Economics said. A U.K. index of manufacturing held at 61.5 in February, the highest since the survey started in 1992, according to Markit Economics and the Chartered Institute of Purchasing and Supply. China Manufacturing In China, the Purchasing Managers’ Index dropped for a third month. The gauge fell to 52.2 from a January reading of 52.9, the China Federation of Logistics and Purchasing said on its website. In contrast, India’s manufacturing grew at the quickest pace in three months, according to a survey by HSBC and Markit Economics. The ISM’s measure of new orders in the U.S. rose in February to 68, the highest since January 2004, from 67.8. The employment gauge jumped to 64.5, the highest since January 1973, from 61.7 in the prior month. The group’s production index rose to 66.3 from 63.5, and a measure of export orders climbed to 62.5 from 62. A gauge of prices paid increased to 82 from 81.5. Experience with higher commodities prices in recent decades, along with currently stable labor costs, suggests a “temporary and relatively modest increase in U.S. consumer price inflation,” Bernanke said in prepared remarks today for his semiannual monetary policy testimony before the Senate Banking Committee. Federal Reserve Bernanke’s comments suggest the central bank will stay on course to complete $600 billion of Treasury purchases through June in a bid to bring down joblessness persisting at 9 percent or higher for almost two years. “The combination of rising household and business confidence, accommodative monetary policy and improving credit conditions seems likely to lead to a somewhat more rapid pace of economic recovery in 2011 than we saw last year,” Bernanke said. The ISM’s inventory index fell to 48.8 from 52.4, and a gauge of customer stockpiles decreased to 40 from 45.5. A figure lower than 50 means manufacturers are reducing stockpiles. The manufacturing industry, which accounts for about 11 percent of the world’s largest economy, led the recovery from the recession that ended in June 2009 as businesses rebuilt stockpiles slashed during the slump that began in December 2007. Rising exports have also spurred production. Last Year In 2010, U.S. gross domestic product increased 2.8 percent, the most in five years. “The numbers coming out of the U.S. for GDP and industrial production are pretty solid, but we have an issue with regard to employment,” James Meil, chief economist at Eaton said on a Feb. 25 teleconference. The Cleveland-based maker of pumps used in forklifts, raised its full-year forecast amid higher hydraulics sales. Auto dealers are seeing improved demand. Car sales in February probably rose to a 12.6 million unit pace, the highest since the government’s cash-for-clunkers program in August 2009, after a 12.54 million annual rate the previous month, according to industry data. Factories may receive a boost this year from a government program that accelerates tax depreciation for equipment purchases. The incentive is part of an $858 billion bill signed by President Barack Obama in December that extends tax cuts for two years, continues expanded unemployment insurance benefits through 2011 and trims payroll taxes.
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#1. To: Brian S (#0)
Another lie. Like this. When a manufacturer goes out of bizness or say moves to China, Mexico, they're just dropped from the stats. The ultimate scenario: One manufacturer in the US left. IT grew 25% to replace the last manufacturer that quit. ;}
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