U.S. manufacturing probably expanded last month at a faster pace than in April because
production and new orders increased, economists said in advance of an industry report for release today.
The Institute for Supply Management’s factory index probably rose to 54.7 last month from 53.9, based on the median of 60 forecasts in a Bloomberg News survey. An index reading above 50 represents expansion, and May’s is expected to be the fourth straight that shows growth.
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“Manufacturing has hit the bottom and is rebounding,” said Sung Won Sohn, chief economist at Wells Fargo & Co. in Minneapolis.
Europe’s manufacturers are joining in the recovery, a separate purchasing managers’ report showed today. The Reuters Purchasing Managers’ Index for the 12 nations that use the euro rose to 51.5 in May from 50.7 in April. The May reading was the best in 15 months.
General Motors Corp. is one U.S. manufacturer that’s ramped up production in recent months to keep up with increased demand. Consumer spending has helped factories bounce back from a 1 1/2-year slump that started in August 2000.
Manufacturing accounts for about one-sixth of the U.S. economy.
The Commerce Department is expected to report that construction spending fell 0.1 percent in April, following a 0.9 percent March decline that had been the first drop since November.
Bloomberg News
