NEW YORK/LONDON • Manufacturing expanded last month for the first time in seven months, fuelled by a surge in orders that signals that American factories are emerging from their worst slump since the last recession.
The Institute for Supply Management's index climbed to 51.8 from 49.5 in February, figures from the Arizona-based group showed yesterday. It was the first time since August that the gauge exceeded 50, the dividing line between growth and contraction.
Factory bookings were the strongest since November 2014 and a measure of production reached a 10-month high as companies made further progress in getting inventories in line with sales. The outlook for manufacturing is a bit brighter following a recent recovery in commodity prices and a tempering of the dollar's strength.
"There are signs that the industry is turning up," said Mr Stan Shipley, an economist at Evercore ISI in New York, before the report. "Businesses have been reducing inventory, so we're getting near the end of that cycle. There are pockets of strength."
The reading was the strongest since July.
Euro zone factories, on the other hand, rounded off the first quarter in slightly better shape than initially thought but growth in activity remained weak despite the deepest price-cutting since late 2009, a survey showed yesterday.
The survey suggests manufacturing is still dragging on the wider economy, and growth was weak in Germany while activity contracted in France. But Spain, Italy, the Netherlands, Austria and Ireland, in particular, saw robust expansions.
Despite the price-cutting and European Central Bank stimulus, Markit's manufacturing Purchasing Managers' Index for the euro zone rose to just 51.6, from February's year-low of 51.2.
The output price index came in below the flash reading of 47.4 at 47.1 and was well down on February's 47.6.
The latest result was the lowest since December 2009.