Manufacturing expanded in March for the first time in seven months, fueled by a surge in orders that signals American factories are emerging from their worst slump since the last recession.
The Institute for Supply Management’s index climbed to 51.8 from 49.5 in February, figures from the Tempe, Arizona-based group showed Friday. It was the first time since August that the gauge exceeded 50, the dividing line between growth and contraction.
Factory bookings were the strongest since November 2014 and a measure of production reached a 10-month high as companies made further progress getting inventories in line with sales. The outlook for manufacturing is a bit brighter following a recent recovery in commodities prices and a tempering of the dollar’s strength.
“The worst is over,” said Harm Bandholz, chief U.S. economist at UniCredit Bank AG. “The rebound in the sentiment data avoids a self-fulfilling negative spiral” and it means “manufacturing will be less of a drag on the economy.”
Twelve of 18 industries surveyed by the purchasing managers’ group posted growth, including printing, furniture, machinery and plastics.
— Bloomberg