By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — Manufacturing activity picked up a bit in September, according to a key survey released Monday that suggests a slow-growing economy that has nonetheless avoided falling into recession.
The Institute for Supply Management’s manufacturing index rose to 51.6% from 50.6% in August. Economists polled by MarketWatch had anticipated an unchanged reading.
Though the ISM gauge has yet to fall below to the 50% indicating expansion since the U.S. officially emerged from recession, it’s nonetheless far below the 61.4% peak of 2011 reached in February.
Globally, the readings also point to slowing and in some places deteriorating activity, with Australia’s falling to 42.3, the worst since July 2009, and Brazil’s in negative territory for the fourth month with a 45.5 reading.
The weak backdrop, at home and abroad, is likely to be a topic that Federal Reserve Chairman Ben Bernanke will encounter when he testifies in front of Congress on Tuesday.
But there were some minor signs of encouragement in the ISM report released Monday.
The employment subcomponent rose 2 points to 53.8%, ahead of Friday’s report on nonfarm payrolls growth.
The new orders subcomponent was unchanged at 49.6%, while production rose 2.6 points to 51.2%.
A manager in the electrical equipment sector said the “market is cautious but still steady.” Another in paper products said, “orders remain consistent and steady — no sign of lower demand.”
But by no means were the managers optimistic. “Business continues to be sluggish,” said one in furniture and related products.
The ISM manufacturing index is a diffusion survey, calculated by asking respondents to measure the change of the current month from the previous month. The ISM combines questions on new orders, production, employment, supplier deliveries and inventories and then seasonally adjusts them.
