By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — American manufacturers expanded at a somewhat faster pace in March and most industries experienced growth, according to a closely followed survey.
A gauge that measures the strength of the manufacturing sector, produced by the Institute for Supply Management, rose to 53.4% last month from 52.4% in February. Reading over 50% indicate that more manufacturers are expanding than contracting.
Economists polled by MarketWatch expected the index to rise to 53.5%.
American manufacturers have led the economic recovery since the end of the recession in mid-2009. After a small dip last summer, growth has generally been on the upswing.
Fifteen of the 18 industries tracked by Tempe, Ariz.-based ISM reported growth last month, up from 11 in the prior month.
The ISM’s production index jumped to 58.3% from 55.3%, while the employment index climbed to 56.1% from 53.2%. That signals an increase in the amount of goods produced and a greater willingness by manufacturers to hire more workers to keep up with the rise in demand.
Those gains more than offset a slight decline in the index for new orders, which slipped to 54.5% last month from 54.9%.
“Our customers are reporting a potential 10% to 13% increase in purchases for 2012,” said an executive at a company that makes heavy machinery. “Actual orders continue to be slow to appear, but expectations continue to be high.”
Another executive at a wood-products company was more cautious. “Sales appear to be picking up over last year at this time, but still have a ways to go,” he said.
Economists are monitoring the economic situation in Europe and China to see if slower growth in those areas is starting to take a bit out of U.S. exports.
So far, U.S. companies have managed to skirt the problem, partly by selling more products to other foreign markets that are growing. Yet several executives polled by the ISM said they are monitoring the situation closely.
Relatively high prices for raw materials are another concern, but executives said they saw little change last month. The ISM’s price index dipped to 61.0% from 61.5%.
