US factories enter longest stretch of rapid growth in 30 years
Mon Aug 2,11:53 AM ET Add Business - AFP to My Yahoo!
WASHINGTON (AFP) - The American manufacturing sector sped up activity in July, cementing the longest stretch of rapid growth in more than 30 years, a survey showed.
AFP/File Photo
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The Institute for Supply Management purchasing managers' index (PMI), based on a survey of supply executives, rose 0.9 point from June to 62.0 in July, in line with private economists' forecasts.
It was the 14th consecutive reading above 50 points, which indicates an expansion in activity.
"The manufacturing sector continues to grow at a rapid rate as the PMI has now been above 60 percent for nine consecutive months," survey chief Norbert Ore said in a statement.
"This is the longest period of growth above 60 percent since the 12-month period of July 1972 through June 1973," he said.
Key findings in the report showed:
-- New orders sped up, with the index rising 4.7 points from June to 64.7 in July.
-- Production accelerated, with the index up 2.9 to 66.1.
-- Employment grew, albeit at a slower rate, with the index easing 2.4 to 57.3.
-- Input prices rose at slower pace, with the index falling 4.0 points to 77.0.
"Today's ISM report provides further verification of the strong state of US manufacturing," said Manufacturers Alliance/MAPI president and chief executive Thomas Duesterberg.
"Overall economic growth in the second half of 2004 will be fueled by strong business equipment investment, purchases of high technology durable goods, and robust exports," he said.
"Leadership is now passing from the consumer and the government to the industrial economy, which bodes well for continued strength in manufacturing jobs and productivity."
The report added to signs that Corporate America is taking over the economic leadership from consumers, who buckled in June under high fuel prices, rising interest rates and the waning impact of tax cuts.
A government report Friday showed the economy slowed sharply in the second quarter to a 3.0-percent annual growth pace from 4.5 percent in the first quarter as consumer spending rose just 1.0 percent.
In the same period, business investment jumped 8.9 percent in the second quarter, up from 4.2 percent in the first. Spending on equipment and software rose 10 percent, up from eight percent.
Many economists expect economic growth to speed up in the second half of the year as consumers bounce back despite an expectation of gently rising short-term interest rates.
US President George W. Bush (news - web sites), campaigning for re-election November 2, highlighted recent reports showing record existing home sales in June and consumer confidence at a two-year high in July.
"These gains in our economy have come at a time when Americans are benefitting from the full effects of tax relief," he said in a weekend radio address.
Democratic presidential challenger John Kerry (news - web sites) has seized on job losses, a middle class "squeeze" and record deficits in the administration's budgets to argue that Bush has mismanaged the US economy.
Mon Aug 2,11:53 AM ET Add Business - AFP to My Yahoo!
WASHINGTON (AFP) - The American manufacturing sector sped up activity in July, cementing the longest stretch of rapid growth in more than 30 years, a survey showed.
AFP/File Photo
Related Quotes
DJIA
NASDAQ
^SPC
10179.16
1892.09
N/A
0.00
0.00
N/A
delayed 20 mins - disclaimer
Quote Data provided by Reuters
Update Windows Lately?
Running software updates can help plug gaping security holes. Plus, preview the anticipated Windows Service Pack 2.
The Institute for Supply Management purchasing managers' index (PMI), based on a survey of supply executives, rose 0.9 point from June to 62.0 in July, in line with private economists' forecasts.
It was the 14th consecutive reading above 50 points, which indicates an expansion in activity.
"The manufacturing sector continues to grow at a rapid rate as the PMI has now been above 60 percent for nine consecutive months," survey chief Norbert Ore said in a statement.
"This is the longest period of growth above 60 percent since the 12-month period of July 1972 through June 1973," he said.
Key findings in the report showed:
-- New orders sped up, with the index rising 4.7 points from June to 64.7 in July.
-- Production accelerated, with the index up 2.9 to 66.1.
-- Employment grew, albeit at a slower rate, with the index easing 2.4 to 57.3.
-- Input prices rose at slower pace, with the index falling 4.0 points to 77.0.
"Today's ISM report provides further verification of the strong state of US manufacturing," said Manufacturers Alliance/MAPI president and chief executive Thomas Duesterberg.
"Overall economic growth in the second half of 2004 will be fueled by strong business equipment investment, purchases of high technology durable goods, and robust exports," he said.
"Leadership is now passing from the consumer and the government to the industrial economy, which bodes well for continued strength in manufacturing jobs and productivity."
The report added to signs that Corporate America is taking over the economic leadership from consumers, who buckled in June under high fuel prices, rising interest rates and the waning impact of tax cuts.
A government report Friday showed the economy slowed sharply in the second quarter to a 3.0-percent annual growth pace from 4.5 percent in the first quarter as consumer spending rose just 1.0 percent.
In the same period, business investment jumped 8.9 percent in the second quarter, up from 4.2 percent in the first. Spending on equipment and software rose 10 percent, up from eight percent.
Many economists expect economic growth to speed up in the second half of the year as consumers bounce back despite an expectation of gently rising short-term interest rates.
US President George W. Bush (news - web sites), campaigning for re-election November 2, highlighted recent reports showing record existing home sales in June and consumer confidence at a two-year high in July.
"These gains in our economy have come at a time when Americans are benefitting from the full effects of tax relief," he said in a weekend radio address.
Democratic presidential challenger John Kerry (news - web sites) has seized on job losses, a middle class "squeeze" and record deficits in the administration's budgets to argue that Bush has mismanaged the US economy.
