US Manufacturing Shows Surprising Strength in August

Source: Reuters

The US manufacturing sector grew more quickly than expected in August, chalking up a 13th straight month of expansion, according to an industry report released Wednes- day.

The Institute for Supply Management said its index of national

factory activity rose to 56.3 last month from 55.5 in July. The median forecast of 79 economists surveyed by Reuters was for a reading of 53.0. A reading above 50 indicates expansion in the sector.

The report’s employment component rose to 60.4 from 58.6 in July.

Manufacturing has expanded every month since August 2009, though the pace of growth had slowed in recent months amid signs that a broader US economic recovery was faltering.

A separate government report Wednesday showed US construction spending fell more than expected in July to its lowest rate in 10 years.

The Commerce Department said construction spending dropped 1.0 per cent to an annual rate of US$805.2 billion, the lowest since July 2000. June’s construction outlays were revised down to show a 0.8 per cent fall, instead of the previ- ously reported 0.1 per cent gain.

Economists polled by Reuters forecast construction spending falling 0.5 per cent in July.