Publication: Bloomberg Published Date: 2/1/2012
Manufacturing probably grew at a faster pace in January, a sign the industry will lead the U.S. expansion early this year, economists said before today’s report.
The Institute for Supply Management’s factory index rose to 54.5, the highest since June, from 53.1 in December, according to the median estimate of 81 economists surveyed by Bloomberg News. Readings greater than 50 signal growth. Construction spending increased 0.5 percent in December after a 1.2 percent gain, other data may show.
Factory production, led by inventory rebuilding at the end of 2011, is poised to keep expanding as the need to update equipment drives orders at companies like Caterpillar Inc. (CAT) and demand for cars lifts sales at automakers. More growth in the industry will help cushion the world’s largest economy from a slowdown in Europe caused by the region’s debt crisis.
“Manufacturing is doing fairly well,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh. “Autos will definitely be a part of the story. The U.S. will still be exporting to other parts of the world while Europe is in a recession.” View entire report.