WASHINGTON (AP) — American manufacturing grew slightly last month and factory hiring increased. The modest gains suggested that the economy entered the new year with some momentum.
The Institute for Supply Management, a trade group for purchasing managers, said on Wednesday that its index of manufacturing activity rose in December to 50.7. That is up from a reading of 49.5 in November, which was the lowest reading since July 2009, one month after the recession ended.
A reading above 50 indicates growth, while a reading below signals contraction.
A measure of employment increased last month to 52.7. That is up from 48.4 in November, which was the first time the employment gauge fell below 50 in three years.
Factories have cut jobs in three of the four months through November, according to government data. The increase in employment in the I.S.M. survey suggests manufacturers may have stepped up hiring last month.
The Labor Department is scheduled to report on December employment on Friday.
A gauge of new orders was unchanged and production grew more slowly, the survey found. Manufacturers also cut back on stockpiles, a sign of concern about future demand.
The closely watched manufacturing survey was completed before Congress reached a deal to avoid the impending expiration of Bush era tax cuts.
The last-minute deal passed Tuesday averts widespread tax increases and delays deep spending cuts that had threatened to push the country back into recession. But most Americans will see some increase in taxes this year, which will most likely slow consumer spending.
A gauge of export orders rose above 50 for the first time in six months, according to the I.S.M. survey. That is a hopeful sign that overseas economies are improving, raising demand for American goods.
A survey in China on Monday found manufacturing activity in that country expanded for the third consecutive month. That adds to evidence that its economy is improving after a slowdown last year.
Growth in the American economy is being driven by other sectors, like housing. The Commerce Department reported Wednesday that construction companies spent more on home building in November, rising 0.4 percent for its eighth monthly increase.
Overall construction spending, however, slipped 0.3 percent because of a 5.5 percent drop in spending on federal government projects. Spending on commercial buildings, like office buildings and shopping malls, also fell. This was the first decline in overall construction spending since March and followed a 0.7 percent increase in October, which was revised lower.
There have been some positive signs for factory production. In November, companies substantially increased their orders for a category of large equipment that reflects their investment plans. That followed a big increase in the same category in October.
Article source: http://www.nytimes.com/2013/01/03/business/economy/manufacturing-increased-slightly-in-december.html?partner=rss&emc=rss