US manufacturing grew for a third straight month in April but at a slower pace, an industry survey showed today, in a sign that factories are rebounding modestly after an 18-month slump and a powerful inventory drawdown.
The Institute for Supply Management's (formerly NAPM) monthly manufacturing index eased more than expected in April to 53.9 from 55.6 in March.
Economists had forecast the index to slip only slightly to 55.2. Any reading above 50 suggests growth, while one below 50 shows contraction. Manufacturing accounts for roughly one-sixth of the US economy.
After a long and painful slump that ended in a massive run-off of inventories left over from boom times, US factories are once again boosting output to meet a rise in new orders. But firms have not recovered enough yet to increase employment or capital spending - key to sustaining future economic growth.
The New Orders Index, a measure of demand for factory goods, fell in April to 59.0 from 65.3 in March while the production index rose in April to 58.0 from 57.8.
But factories shed more jobs, extending a trend since mid-2000 and knocking down the Employment Index to 46.7 from 47.5 in March.