Manufacturing in the US unexpectedly accelerated in September, propelled by gains in exports and production. The Institute for Supply Management’s factory index climbed to 51.6 last month from 50.6 in August, the Tempe, Arizona-based group said on Monday. A level of 50 is the dividing line between growth and contraction. The median forecast of 82 economists surveyed by Bloomberg News projected a drop to 50.5.
Growing emerging economies like China and a rebound in Japan following the March earthquake and tsunami may continue to lift demand from overseas, giving a boost to companies like Emerson Electric Co and Honda Motor Co Manufacturing, which accounts for about 12 per cent of the economy, may prevent the recovery from being cut short even as consumer spending cools.
The report points to “an economy that continues to move sideways, certainly not one that is falling off a cliff,” said Ellen Zentner, a senior economist at Nomura Securities International Inc. in New York, who forecast the ISM measure would rise to 52. “The support for new orders was coming from external demand.” David Resler is the chief economic adviser for Nomura. Estimates for the manufacturing index in the Bloomberg survey ranged from 45 to 52. While 50 is the midway point between expansion and contraction in the industry, a reading above 42.5 indicates an expansion in the overall economy.