Manufacturing in the U.S. expanded at a faster pace than forecast in March, a sign the industry is weathering slower global growth. The Institute for Supply Management’s factory index climbed to 53.4 last month from 52.4 in February, the Tempe, Arizona- based group’s report showed today. Readings greater than 50 signal growth. The median forecast in a Bloomberg News survey called for a gain to 53. Production accelerated to a three-month high and a gauge of factory employment climbed to the highest level since June.
Increased auto sales, sustained corporate purchases of equipment and inventory rebuilding are underpinning the industry that led the U.S. out of recession more than two years ago. At the same time, less demand from overseas customers remains a risk to factories, which account for about 12 percent of the economy.
“Manufacturing is going to continue to help boost economic growth,” said Omair Sharif, an economist at RBS Securities LLC in Stamford, Connecticut, who correctly forecast the gain in the index. “We’ve got a bit of a slowdown globally that is affecting exports, but for the most part there’s pretty healthy demand for U.S.-made products.”
Stocks erased losses after the figures, with the Standard & Poor’s 500 (SPX) Index climbing 0.2 percent to 1,411.4 at 10:32 a.m. in New York. The yield on the benchmark 10-year Treasury note fell to 2.18 percent from 2.21 percent on March 30.
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