Activity in the US factory sector jumped in December after three months of decline, a report said today.
The Institute for Supply Management said its index of manufacturing business conditions rose to 54.7 from 49.3 in November - far above the modest increase to 50.3 analysts had expected. However, the group said the reasons for the magnitude of improvement were not clear.
The last time the national survey came in above the critical 50 level, which signals expansion in the sector, was in August, with a reading of 50.5.
"These positive signs may help provide momentum [for the first quarter] as companies start to see some improvement," said Mr Norbert Ore, director of the ISM survey. But he said the magnitude of improvement was "somewhat difficult to explain".
The ISM new orders index surged to 63.3 from 49.9 in November - the largest one-month increase since 1980. A barometer of future production, the new orders index has recovered close to its peak of 65.3 in March. The employment index improved slightly, to 47.4 from 43.8.
Manufacturing activity, which accounts for around one-fifth of the US economy, turned down in late summer and remained in the doldrums as confidence faltered, reflecting the precarious nature of the US economic recovery. Economists hope for steadier improvement in the economy in 2003.