Beating most analysts' expectations, manufacturing in the U.S. grew for the 13th month in a row.
The Institute of Supply Management said its manufacturing index rose to 56.3 points, from 55.5 percent in July, a much larger jump than the 52.9%t predicted by economists.
"Manufacturing activity continued at a very positive rate in August as the PMI rose slightly when compared to July. In terms of month-over-month improvement, the Production and Employment Indexes experienced the greatest gains, while new orders continued to grow but at a slightly slower rate. August represents the 13th consecutive month of growth in U.S. manufacturing," explained Norbert J. Ore, ISM.
And manufacturing has consistently outperformed the pace of growth in the general economy during this recovery, points out Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI. "For example, GDP increased only at a 1.6 % annual rate in the second quarter of 2010 but manufacturing industrial production expanded at a 7.9% rate. Amidst evidence that the general economy is slowing to a crawl, this report indicates that manufacturing activity continues to grow at a healthy pace. Industrial firms are building inventories that were depleted during the recession and exports are surging in machinery and equipment and material industries.
"The strong growth in manufacturing production is partly catch up for a substantially more severe recession in the industry than the overall economy, he added. Also, the depth and length of the previous downturn built pent up demand for replacing big ticket consumer goods and repair and replacement in business. We expect manufacturing production to decelerate in the near term but still grow faster than overall GDP."
Copyright Agence France-Presse, 2010