The Institute for Supply Management (formerly the National Association of Purchasing Management) has announced that its index of factory activity rose from 44.5 in November to 48.2 in December, its highest level in 14 months. This has been taken by some as a sign that the long erosion of US manufacturing is nearing an end, adding to speculation that the economy is coming out of recession.
The ISM index remains below 50, as it has through all of 2001, suggesting that manufacturing continued to shrink last month, but at the slowest rate in the year.
The report marks the seventeenth consecutive month decline in the manufacturing industry, but suggests that industry is now very close to reaching its bottom, “ said Michael Burt, an analyst with Economy.com.
Two components signalled the strongest growth in new orders, a leading indicator, since April.
