As the sovereign-debt crisis in Europe drags down U.S. stocks, September data showed that the American manufacturing sector is fighting hard to claw its way back from the recession.
The Institute of Supply Management's closely watched purchasing managers index improved to 51.6 in September, up from 50.6 in August.
Economists had expected the index to grow at a slower rate to 50.5.
The 1-point increase indicated "expansion in the manufacturing sector for the 26th consecutive month, at a slightly higher rate," said Bradley Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee.
He also noted that the September index marked "a return to growth after contracting in August for the first time since May of 2009."
Of the 18 manufacturing industries, ISM noted that 12 reported growth in September, in the following order:
- Wood products
- Petroleum and coal products
- Food, beverage and tobacco products
- Apparel, leather and allied products
- Nonmetallic mineral products
- Machinery
- Miscellaneous manufacturing
- Transportation equipment
- Plastics and rubber products
- Printing and related support activities
- Chemical products
- Computer and electronic products
'Neither Booming Nor in a Recession'
The Manufacturers Alliance/MAPI found the data encouraging on two fronts: "The index is above 50%, indicating growth, and the overall index increased," said Daniel Meckstroth, chief economist for the organization.
"Frankly, the ISM index has understated the strength in manufacturing as measured by the industrial production index in July and August, but now seems to be catching up with the acceleration in manufacturing activity that occurred after the Japanese tsunami's supply chain effects dissipated."
The alliance believes U.S. manufacturing production grew at a 4% annual rate in the third quarter, outpacing the 2% growth expected in the overall economy, Meckstroth noted.
"Business-equipment spending remains robust in light of strong profits and generous cash reserves," he said. "Consumers have pent-up demand for durable goods after the long recession and lethargic recovery.
"Manufacturing is neither booming nor in a recession. The sector is experiencing a subpar recovery from a very deep recession."
