ISM index rises to 51.5 from 49.6
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — American manufacturers resumed growing in September after a three-month contraction, outperforming most of the rest of the world, according to a closely followed survey.
The Institute for Supply Management said its survey of purchasing managers — the executives who order raw materials and other items — climbed to 51.5 from 49.6 in August. It was the highest score since May.
The increase easily surpassed Wall Street expectations. Economists surveyed by MarketWatch had forecast the index to remain under 50 for the fourth straight month, at 49.7.
In U.S. markets on Monday, stocks extended their rally after the positive ISM reading, with the Dow up 145 points in recent activity.
Readings above 50 indicate business is improving; readings under 50 signal deterioration.
A jump in new orders — the index rose to 52.3 from 47.1 — underscored the gains in the September ISM report. The production index also gained 2.3 points to end at 49.5.
All components in the ISM report advanced.
Until September’s reading, the U.S. manufacturing sector had shown slight contraction for three months in a row, the first time that’s happened since the tail end of the 2007-2009 recession.
Other manufacturing sectors around the world also posted improvement in September, according to a flurry of index released since last Friday. Yet most were in still in negative territory, including China and the euro zone.
A similar index that tracks the euro-zone manufacturing sector rose slightly in September but indicated contraction for the 14th consecutive month. The gauge, produced by Markit, rose to 46.1 from 45.1 in August. The third quarter was Europe’s worst in three years, Markit said.
In China, the world’s second largest economy, a survey compiled by HSBC remained under the key 50 benchmark for the 11th straight month. The index rose to 47.9 from 47.6.
Japan’s manufacturing index edged up to 48.0 in September from 47.7 in August.
Jeffry Bartash is a reporter for MarketWatch in Washington.
