Manufacturing growth the strongest in 8 months

Sep 2, 2003 12:00 PM

U.S. manufacturing in August grew at the strongest pace in eight months, the Institute for Supply Management reported today.

ISM’s factory index rose to 54.7 last month from 51.8 in July. August marked the second month the index has been greater than 50, signaling expansion in manufacturing activity, following four months of contraction.

The index was the highest since a 55.2 reading last December. Economists had expected a reading of 54, Bloomberg reported.

Manufacturing is one of trucking’s largest and most important customers.

Analysts told Bloomberg that with inventories low, companies are placing more orders and factories are stepping up production to meet rising demand.

The new orders index, which accounts for about a third of the total, rose to 59.6 from 56.6 in July. The production index, a gauge of work being performed, rose from 53.3 to the highest since June 1999.

The index of inventories fell to 42.5 from 45.9, indicating inventories are being run down at a faster pace. The employment index fell to 45.9 from 46.1. The index has been below 50 for 34 months.

ISM surveys more than 400 companies in 20 industries, including clothing, printing, transportation, furniture and plastics for this index.