US Manufacturing Job Outlook Brightens
The second quarter of the year ''is off to a very strong start,'' says analyst
TEMPE, Arizona - 05/21/04 - The nation's manufacturing sector added jobs at a faster rate in April, according to the Institute for Supply Management's (ISM) Report On Business.
Published by the Thomas Register, the quarterly report gives an early indication of the status of the nation's manufacturing sector and is based on responses to a national survey of manufacturers conducted by the ISM.
Signifying manufacturing job gains, the report's employment index increased for the sixth straight month, to a level of 58% from 57% in March. It is still at its highest level since December 1987.
According to April figures, economic activity in the manufacturing sector grew for the 11th consecutive month, while the overall economy expanded for the 30th month in a row.
All responding industries reported growth - apparel; paper; furniture; industrial and commercial equipment; computers; transportation and equipment; primary metals; instruments and photographic equipment; textiles; glass, stone and aggregate; petroleum; electronic components and equipment; wood and wood products; rubber and plastic products; chemicals; tobacco; fabricated metals; printing and publishing; and food processing.
Based on the survey of purchasing managers, an index above 50 indicates expansion within the manufacturing sector while a reading below 50 signifies contraction over the prior month.
An index at 50 means that there was an equal balance between manufacturers reporting gains and declines in their business.
The April manufacturing index of 62% was a slight decrease from March's 63% and fell below economists' expectations of a 63 reading. Still, it represents healthy growth for the sector.
Moreover, it marked the sixth consecutive month that the manufacturing index has exceeded 60%.
"The index was strong in March. It is still strong in April," Chris Low, chief economist at FTN Financial in New York, recently told USA Today. "That suggests we have not lost any momentum in the economy."
According to Norbert J. Ore, manager of the index for the ISM and group director of strategic sourcing and procurement at the Georgia-Pacific Corp, "The manufacturing sector continued to improve in April. While new orders contracted slightly compared to last month, production moved upward, and employment grew at a faster rate."
Meanwhile, manufacturers once again experienced higher prices in their purchases, according to ISM's prices index. In fact, the April index of 88% - an increase of 2 percentage points from March's 86% - was the highest reading since November 1979. "The list of metals up in price is quite extensive - almost every category of product has seen price movement," said Ore.
Comments from survey respondents reflect the continuing improvement of the manufacturing sector.
However, said Ore, "There are still a number of companies in various industries that have yet to benefit from the recovery...with concerns about the availability of ferrous and non-ferrous metals, and escalating costs in a market that is still resistant to higher consumer prices."
The second quarter "is off to a very strong start. Many respondents indicate that order backlogs are growing for the first time in several years," he said.
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