Economists Expect Manufacturing Growth In September
NEW YORK (AP) — Growth in the manufacturing sector likely continued in September but at a slightly slower pace, economists say.
Makers of goods such as PCs, autos, furniture and factory machinery helped pull the economy out from the recession because of overseas sales and strong demand from businesses that needed to replenish their stockpiles of goods.
While the early burst of growth has slowed since last summer, economists expect the manufacturing sector to expand for the 14th straight month in September. A report from the Commerce Department from late September showed that U.S. companies increased investments in technology and other equipment in August.
Economists polled by Thomson Reuters forecast that the index from the Institute for Supply Management read 54.5 last month versus 56.3 in August. The report will be released at 10 a.m. EDT Friday.
A reading above 50 indicates growth. The index peaked at 60.4 in April, its highest level since June 2004. The index had bottomed at 32.5 in December 2008, the lowest level since June 1980.
The report surveys production managers at about 350 companies around the country, makers of products used by both businesses and consumers, including food, tobacco, electrical equipment and appliances.
Even though companies that make goods comprise a much smaller part of the U.S. economy than businesses that provide services, the manufacturing sector's health has been important for the U.S. labor market this year. Job gains at industrial companies have made up about 20 percent of net hiring by businesses and other private organizations in 2010, even though only about one in 10 private sector employees work inmanufacturing.
Some factories are still laying off employees to cut costs. Manufacturing executives responding to ISM's survey have suggested that they are willing to fill empty positions as business grows, however. According to the government, 145,000 manufacturing jobs have been added to the economy this year.
From December 2007, when the recession officially began, through the end of 2009, companies cut 2.2 millionmanufacturing jobs.