Manufacturing activity continues to increase
July 15, 2002,
In one more unambiguous sign that the nation's economy is on the rebound, manufacturing activity expanded for a fifth straight month in June, and grew at a faster pace than it had the month before, according to the bellwether index compiled by the nation's purchasing managers.
Textiles recorded not only a gain in production but a "strong upswing in hiring during June," said the purchasing managers' report.
"June was a good month for manufacturing," said Norbert Ore, chairman of the trade group's Manufacturing Business Survey Committee, with 15 industry sectors recording an improvement in production. Indeed, the June Production Index climbed to a level of 61.4, its highest reading in two years.
The monthly report noted, "Comments from purchasing and supply executives indicate that the manufacturing recovery is gaining momentum, but business is not as strong when looking at year-over-year performance. The weakening U.S. dollar has had an immediate impact on export orders as survey respondents note activity in offshore markets that had been closed due to currency valuations."
Key to June's overall improvement were widespread gains in output, with 15 out of 19 industries tracked recording improvements in production. The June Production Index climbed to 61.4 percent, up 2.9 percentage points from the 58.5 percent recorded in May. Encouragingly, June marked the seventh straight month when the index has been above 50 percent, signifying growth in production.
The long-abused textiles sector led the manufacturing economy in production gains during June, said the purchasing managers.
The New Orders Index remained strong but gave up some of its earlier gains in June. The New Orders Index slipped to 60.8 percent, down 2.3 percentage points from 63.1 percent in May. Textiles, once again, led the list of big gainers.
The Backlog of Orders Index came in at 53.5 percent, down from 56.5 percent in June, indicating a slower rate of growth in manufacturers' backlogs. But two key home furnishings segments, furniture and textiles, led the list of industry sectors reporting an increase in order backlogs.