Manufacturing grows at fastest rate since 2004

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- Manufacturing activity grew for the eighth straight month in March, at the fastest rates since July 2004, according to a report Thursday.

The Tempe, Ariz.-based Institute for Supply Management's (ISM) manufacturing index rose to 59.6 in March from the February reading of 56.5. Economists surveyed by Briefing.com were expecting a reading of 57.

"The report is very positive on all points," said Dan Meckstroth, a chief economist with the Manufacturers Alliance. "The index itself is at its best we've seen so far in this recovery, and it's up substantially since February."

The strong number was driven by significant growth in new orders and production, as well as larger inventories, which grew for the first time in 46 months.

The breakeven point for the index is 50, with a reading above that indicating growth in the sector. March's higher score means the manufacturing sector grew at a faster pace than the month before.

The monthly report surveys purchasing managers, and because it's a survey, some analysts say the index is highly subjective and overrated. But others view the report as a valuable indicator of broad trends and the overall health of the economy.

Overall, 17 of the 18 manufacturing industries surveyed showed growth. Plastics and rubber products is the only industry that reported contraction.

The new orders component rose to 61.5 from 59.5 the month before, while the production component increased to 61.1 from 58.4.

Inventories inched higher to 55.3 -- the first time that component has posted above the 50 tipping point in 46 months.

While the report's employment component slipped 1 point to 55.1 in March, that was still above the level that indicates growth.

Strong productivity gains usually come at the early stages of recovery, Meckstroth said, as new orders bounce back, manufacturers start revving up their previously underutilized machinery, and factories that may have been overstaffed start adding work hours. Job growth follows suit a bit later in the recovery, he said.

"As production picks up there's more pressure on companies to add people," Meckstroth said. "The fact that we're getting any growth in employment is very positive. It's another positive sign that the industry's recovering and will continue to recovery."

The ISM report came on the same day as separate reports showingmanufacturing activity also rose more than expected during March in both China and the United Kingdom. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,164.95 -251.90 -1.45%
Nasdaq 4,635.24 -48.17 -1.03%
S&P 500 1,994.99 -26.26 -1.30%
Treasuries 1.68 -0.08 -4.34%
Data as of 11:35pm ET
Company Price Change % Change
Bank of America Corp... 15.15 -0.28 -1.81%
Apple Inc 117.16 -1.74 -1.46%
Microsoft Corp 40.40 -1.61 -3.83%
AT&T Inc 32.92 -0.04 -0.12%
General Electric Co 23.89 -0.19 -0.79%
Data as of 4:01pm ET

Sections

Super Bowl ads are getting more expensive every year. But are companies wasting money? In the social media era, tweets and viral videos can also get a company noticed. More

Many in the middle class, particularly the single and the elderly, won't see any tax breaks under Obama's MIddle Class Economics plan More

Here's where Seahawks and Patriots fans eat, shop, and play, according to data from ad tech startup PlaceIQ. More

Wix is advertising in the Super Bowl -- but it's just the latest tech unknown to make its debut there. More

401(k) balances reached a record high last year, thanks to a soaring stock market and larger contributions from workers participating in the savings plans, according to Fidelity. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2015 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2015. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2015 and/or its affiliates.