Manufacturing grows for 9th straight month

NEW YORK (CNNMoney.com) -- The manufacturing sector grew for the ninth consecutive month in April, and at its fastest rate since June 2004, according to a report released Monday.

The Tempe, Ariz.-based Institute for Supply Management (ISM) manufacturing index rose to 60.4 in April, from a March reading of 59.6. Any score above 50 indicates growth in the manufacturing sector.

April's number is slightly better than expected, driven by increases in productivity, new orders and manufacturing jobs. Economists surveyed by Briefing.com were expecting a reading of 60.

"Overall, the recovery in manufacturing continues quite strong, and the signs are positive for continued growth," Norbert Ore, chairman of the ISM's survey committee, said in a release.

Of the 18 industries surveyed in the report, 17 reported growth. Apparel, non-metallic minerals and wood products were among the industries showing the strongest growth.

New orders, productivity, imports and commodity prices all rose at faster rates in April than the month before, indicating that demand for products is driving a recovery in manufacturing.

As for factory jobs, trends continue to look up. The employment component of the report grew for the fifth consecutive month, rising to 58.5 in April from 55.1 the month before.

"It affirms something we already know -- manufacturing is in a full-blown recovery," said Tim Quinlan, an economist with Wells Fargo Securities. "Now, the markets are waiting for that recovery to spread to other sectors."

The inventories part of the index shrunk slightly in April, though, to just under 50 -- the tipping point -- from 55.3 in March.

That decline is not entirely surprising, Quinlan said, as manufacturers are still taking their time to rebuild inventories after scaling back at unprecedented rates during the recession.

The ISM manufacturing index is determined by a survey of purchasing managers and reflects the number of people who say economic conditions are better, compared with those who say conditions are worse. While the index can paint a picture of broad trends, some analysts warn that because it stems from a survey, the index can be subjective.