Manufacturing grew for the 21st straight month in April, fueled by a weak dollar that has made U.S. goods cheaper overseas. But the cost of raw materials also rose for the fifth straight month, a growing concern for many companies.
The Institute for Supply Management, a trade group of purchasing executives, said Monday that its index of manufacturing activity dipped to 60.4 in April. That's down from 61.2 in March and 61.4 in February, the fastest expansion in nearly seven years. A reading above 50 signals growth.
The index has topped 60 for four straight months. It bottomed out during the recession at 33.3 in December 2008, the lowest point since June 1980.
Manufacturing has been one of the economy's brightest spots since the recession ended in June 2009. Factories have benefited from strong overseas demand for machinery and other goods. And U.S. consumers have spent more on autos, appliances and computers.
"Manufacturers are very optimistic about the future right now and doing a lot of hiring," said Norbert Ore, chairman of the ISM's survey committee.
One concern for many companies is the rise in commodity prices. The survey's prices paid index rose to the highest level in nearly three years.
Many companies are hesitant to pass along the added costs to the consumer, who is coping with 8.8 percent unemployment and slow job growth.
Separate measures of new orders and production both topped 60 for the fifth straight month, though they both declined in April compared to March. The employment index also dipped but showed that manufacturers are still adding jobs. The employment index has risen in the past four months at the fastest pace in 38 years.