US manufacturing grows at fastest pace since 2004

WASHINGTON: Manufacturing expanded in April at the fastest pace since 2004, propelling a US recovery that’s getting a bigger lift from consumer spending.

The Institute for Supply Management’s factory index rose to 60.4, the highest level since June 2004 and exceeding the median forecast in a survey of 76 economists. Readings greater than 50 signal expansion and Monday’s report marks a ninth consecutive month of growth.

Parker Hannifin is among manufacturers receiving more orders as US and overseas customers invest in new equipment and replenish inventories. The factory resurgence may soon translate into faster growth at service industries, fuelling job gains and solidifying the expansion.

“Manufacturing is benefiting from recovery in global trade with stronger performances abroad and the inventory cycle,” Julia Coronado, a senior US economist at BNP Paribas in New York, said before the report.

“With the demand recovery, there is a backlog of activity that is coming forward.” Also Monday, the Commerce Department reported that personal spending rose 0.6% in March, the most in five months, after a 0.5% gain.

Incomes increased 0.3%, the first gain this year. Economists projected the US factory index to rise to 60, based on the median forecast. Estimates ranged from 57 to 65.

The US is sharing in a global manufacturing expansion that’s gaining strength. Europe’s factories grew last month at the fastest pace since June 2006, while Australian manufacturing growth jumped to the highest level since May 2002, other reports showed Monday.

A manufacturing index based on a survey of euro-area purchasing managers increased to 57.6 from a March reading of 56.6, London-based Markit Economics said. A gauge of factory performance in Australia surged 9.3 points to 59.8 in April, the Australian Industry Group and PricewaterhouseCoopers said.