Ahead of the Bell: Manufacturing index

AP News
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Posted: Apr 01, 2011 7:34 AM
Ahead of the Bell: Manufacturing index

Manufacturing activity probably increased in March for the 20th straight month, though at a slightly slower pace than the previous month.

Economists forecast that the Institute for Supply Management's index of manufacturing activity will edge down to 61.3, from 61.4 in February. Any reading above 50 indicates that manufacturers are growing.

The trade group of purchasing executives will release its report Friday at 10 a.m. EDT.

Manufacturing has been a key driver of economic growth and employment since the recession ended in June 2009. Automakers, appliance firms and companies that make big agricultural equipment, such as Caterpillar Inc., have rebounded strongly, in part because of healthy overseas demand.

February's reading of 61.4 was the highest in nearly seven years. The index bottomed out during the recession at 33.3 in December 2008, the lowest point since June 1980.

A dip to 61.3 would still be consistent with healthy growth at U.S. factories. Manufacturers are also hiring, adding almost 190,000 jobs in the past year.

The trade group's employment index jumped to 64.5 in February, only the third time in a decade it has topped 60. Economists will watch that index closely to see if hiring is likely to continue.

The Institute for Supply Management, based in Tempe, Arizona, compiles its manufacturing index by surveying about 300 purchasing executives across the country.