An industry report released on Monday showed that U.S. manufacturing is starting to show signs of recovery driven by increase in new orders, following an eight-month low which culminated in February.
According to the article on Reuters, The Institute for Supply Management (ISM) said its index of national factory activity rose to 53.2 in February, up from January’s read of 51.3, which was the weakest reading since May 2013.
February’s figure surpassed the median forecast of 52.0 in a Reuters poll of economists.
The report reversed two straight months of slowing growth, even though it remains well below November’s peak reading of 57, which was the highest reading since April 2011.
Readings above 50 indicate an expansion in the sector.
The improvement comes as a result of the increase in the forward-looking new order index, which rebounded to 54.5 from 51.2 in January.
While the new order index showed improvement, the report also revealed some cautionary notes, as the production subindex sank to 48.2 from 54.8, posting its third straight month of declines and falling below 50 for the first time since August 2012. The employment index readings remained at 52.3.