WASHINGTON (AP) — U.S. manufacturing expanded more quickly last month as companies received more orders and boosted their stockpiles.
A measure of production fell to its lowest level in nearly five years, likely a casualty of severe winter weather. But the rise in orders raises the possibility that factory output will rebound in coming months, economists said.
The Institute for Supply Management, a group of purchasing managers, said Monday that its manufacturing index rose to 53.2 in February from 51.3 in January. The increase only partly reversed a five-point drop in January from December.
Still, any reading above 50 signals growth. And economists were encouraged by the increase in both new and backlogged orders.
Growth in February was also broad-based: Fourteen of the 18 industries that are tracked by the survey reported growth. That was up from 11 industries in January. The industries reporting expansion included machinery, plastics, transportation equipment and paper products.
"We expect a substantial rebound ... when weather patterns eventually normalize," said Joseph LaVorgna, an economist at Deutsche Bank.
A gauge of employment was unchanged at 52.3, suggesting that factories added only a modest number of jobs last month.
Bradley Holcomb, chair of the ISM's survey committee, said many businesses blamed bad weather for a slowdown in their output.
"Other comments reflect optimism in terms of demand and growth in the near term," Holcomb said.
The production index fell to its lowest level since May 2009. And the slowdown in output caused manufacturers' stockpiles of raw materials and parts to surge by the most in 25 years.
The weather also disrupted the shipping of raw materials, leaving manufacturers with only some of the supplies they needed to produce goods, Holcomb said. That slowed production and left more parts sitting in warehouses, thereby swelling inventories.