Last month, the manufacturing industry saw economic growth that far surpassed even the most optimistic forecast set by a Bloomberg News survey. So, just how much growth? According to the Institute for Supply Management’s factory index, manufacturing rose to 54.8 last month – any number over 50 displays growth. This growth means more assembly lines and more jobs.
According to Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc, “Manufacturing continues to be a bright spot in the recovery”. She also stated a somewhat surprising fact: drop-off of foreign demand for U.S. manufactured goods has yet to occur. A key factor in this may be due to stronger auto production, which was seen January through March. The auto industry added approximately 1.12 percentage points to growth as sales saw their fastest pace in almost four years.
For the second quarter, demand is holding steady. Chrysler, Ford and General Motors all reported that April sales further exceeded analyst estimates which had projected the growth. However, some reports fear the rising price of gas could have a dramatic impact to the auto industry in the coming months. On the other hand, some companies are seeing rising profits due to this increase. 3M Co., the maker of fuel system tune-up kits, posted an 8.6 percent increase in sales.
Despite the good news, there remain some areas of concern. Business equipment along with related software, showed its weakest rise of the past three years. Another problem that could impact manufacturing growth here in the U.S. regards to the economic climate in the rest of the world. “The global economy is uneven,” stated John Faraci, CEO of International Paper Co.