Manufacturing Sector Continues To Grow in March & April 2010

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The manufacturing sector of the United States continues to grow and it continues to do so at a staggering pace. In fact, many investors are feeling that the manufacturing sector will help improve the economy and bring the country out of its deep recession. With the manufacturing sector gaining steam, that means more jobs for the people who need them, and by extension, more spending money that helps fuel the American economy through retail sales.

For the eighth straight month, the U.S. manufacturing industry grew and it did so at a faster pace than has been seen in the past five years. What does this mean? This means that the manufacturing sector is recovering and with it, the economy of the entire country.

Many investors look at the manufacturing sector as a way to determine the health of the economy, no different than looking at consumer demand levels and unemployment. One reason for this growth, most experts feel, is the climbing export rates of manufactured goods and the stockpile adjustments of the industry.

In a report issued by the Institute for Supply Management, the manufacturing industry was growing at its fastest rate since July 2004, which coupled with the fact that the U.S. economy has grown for the 11^th month in a row, shows investors that yes the economy is indeed improving.

The Purchasing Managers Index rose from 56.5 percent in February to 59.6 percent in March. This shows that the sector is indeed expanding at a faster rate and the PMI score remains well above the average of the past 12 months, which sits eight percent down at 51.8 percent.

The new orders index also rose by two points, as did production, which rose by 2.7 percent. Prices rose by eight percent and the inventories of manufacturers rose by eight percent as well. The only trouble spot in all of this was the drop of one percent in the employment index for the manufacturing sector.

In all the manufacturing industries, 18 in all, only one did not report growth. As well, according to KPMG International, a tax advisory firm, the net balance of 65.7 percent for executives in the manufacturing industry, should increase in the next 12 months as well.

Some economists are still worried though about how employment will be affected by an upswing in the sector and whether investments will come back in their previous levels. That all being said, it is generally considered that when the manufacturing industry is doing well, the rest of the economy will soon be doing well.

For economists and investors, the news that the manufacturing sector is improving is good news. This means that there will hopefully be more jobs, more money and more sales, which will help get the American economy out of its recession and back into positive territory. The coming months could be very good for the manufacturing sector and the economy.

Further Links

US Economy Future

US Recession AfterEffects