Activity in the U.S. manufacturing sector unexpectedly expanded at a faster rate in the month of April, according to a report released by the Institute for Supply Management on Tuesday, with the index of activity in the sector rising to a ten-month high.
The ISM said its purchasing managers index climbed to 54.8 in April from 53.4 in March, with a reading above 50 indicating an expansion in manufacturing activity. The increase surprised economists, who had expected the index to edge down to a reading of 53.0.
With the unexpected increase, the purchasing managers index rose to its highest level since coming in at 55.8 in June of 2011.
Bradley Holcomb, chair of the ISM Manufacturing Business Survey Committee, said, "Comments from the panel generally indicate stable to strong demand, with some concerns cited over increasing oil prices and European stability."
The report also showed that the new orders index climbed to 58.2 in April from 54.5 in March, while the production index rose to 61.0 from 58.3.
The employment index also edged up to 57.3 in April from 56.1 in March, pointing to a faster rate of job growth in the manufacturing sector.
Meanwhile, the ISM said that the inventories index slid to 48.5 in April from 50.0 in March, indicating a contraction in inventories.
The backlog of orders index also dropped to 49.5 in April from 52.5 in the previous month, sliding below the key 50 level.
With regard to inflation, the prices index was unchanged at a reading of 61.0. The index is just below February's 61.5, which was the highest since June of 2011.
Commenting on the report, Rob Carnell, chief international economist at ING, said, "This is a surprisingly good outcome, and will help offset the headwinds to U.S. growth coming from across the Atlantic."
Thursday morning, the ISM is scheduled to release a separate report on activity in the service sector in the month of April. The index of activity in the sector is expected to come in unchanged from the previous month at 56.0.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org