NEW YORK — A report on manufacturing activity shows the sector contracted less than expected in June, posting its best showing since last August and another sign that a recovery may be near.
Manufacturing sectors overseas also are rebounding a bit, according to new reports, but other U.S. economic data were mixed. Construction spending fell more than expected in May, while pending home sales edged up.
The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index registered 44.8 in June, up from 42.8 in May. Analysts polled by Thomson Reuters had expected a reading of 44.5.
“A slow recovery for manufacturing is forming,” said Norbert Ore, chair of the ISM’s manufacturing business survey committee.
A reading below 50 indicates contraction. June’s reading marks the 17th straight month of deterioration in manufacturing.
Still, there is an encouraging pattern in recent ISM manufacturing reports. This is the second straight month that the index has been above 41.2 after seven consecutive declines. The ISM says a reading above that level is consistent with expansion in the overall economy — even though the manufacturing sector itself is still shrinking.
“This latest gain suggests the recession may finally have ended at the close of the second quarter, a mere 19 months after it started,” said Capital Economics’ analysts. “However, there is little evidence that this tepid recovery will turn into anything much stronger.”
Other countries’ manufacturing sectors also are recovering. Two reports from China, the world’s third-largest economy, showed small gains in surveys of manufacturers. Elsewhere, the purchasing managers index from the 16-nation euro zone showed a slower pace of decline in June, and the equivalent index in Britain hit a 15-month high of 47.
British manufacturing output rose for the first time since March 2008. Big Japanese manufacturers reported being slightly more optimistic about business conditions, but cut capital spending sharply.
While encouraging, the ISM survey hasn’t noted growth in manufacturing since January 2008. The manufacturing index includes new orders, production, employment, inventories, prices, and export and import orders. It is based on a survey of the Tempe, Ariz.-based ISM’s members from 18 industries.
On Wall Street, stocks rose after the better-than-expected ISM manufacturing report. The Dow Jones industrial average added about 95 points in afternoon trading, and broader indices also moved higher.
But not all the economic news was as rosy. A Commerce Department report showed that construction spending fell 0.9 percent in May, nearly double the 0.5 percent economists had expected, and activity in the past two months was revised lower.
Construction rose 0.6 percent in April, down from the 0.8 percent increase originally reported. A March increase of 0.4 percent was replaced with a decline of the same amount. That left the April gain as the only increase in the past eight months.
The National Association of Realtors, meanwhile, said pending home sales rose for a fourth straight month in May. The index of pending sales, which tracks signed contracts to purchase previously owned homes, rose 0.1 percent to 90.7, better than expected.
Housing and autos are two sectors with ongoing woes, Ore said, while manufacturers connected to the computer, electronics and petroleum industries might say their tides have turned.
However, a good sign for all industrial companies was shrinking customer inventories. Low inventories mean that businesses will need to restock from manufacturers, prompting new orders and production. The production index grew to 52.5 in June from 46 in May — the first growth reading after nine months of decline.
But new orders shrank to 49.2 after growing in May for the first time in 17 months. Growth in new orders is a perquisite for ramping up production and hiring.
The panic caused by the crash in financial markets late last year has finally worked its way through manufacturing, said Cliff Waldman, economist for the Manufacturers Alliance/MAPI, an industry trade group.
However, a strong recovery in manufacturing is being crimped by weakening economies worldwide and a reluctance by businesses to ramp up capital spending — which means ongoing job cuts.
“Manufacturing is just not going to be a job producer,” Waldman said.
The pace of manufacturing layoffs may have slowed since this winter, but it has not stopped.
Farm machinery company Deere & Co. said Tuesday that 800 salaried employees, or 3 percent of its salaried work force, took a voluntary buyout offer. That’s four times as many as the company expected when it announced the program in April.
In June, Cessna Aircraft Co., which makes corporate jets, said it would cut 1,300 jobs by this summer on top of 6,900 earlier layoffs.
Local & Bistate
NEW: Manufacturing index shrinks less than expected
- Local & Bistate
-
-
Packing the hall
If you didn’t come early, the seats were hard to find.
-
Alternative-fuel project has Rose, ISU students all charged up
The future of Earth’s auto industry is intertwined with the career prospects of local university students, and a world-class team shined with green energy Sunday.
-
Montford Point Marine
In 1943, 19-year-old Ezell Odom was on the sandy beach of a tiny South Pacific island about 7,000 miles from his parent’s home in Terre Haute.
-
K-9 officer Shadow honored as a hero
A Terre Haute K-9 officer injured in the line of duty has been honored as a hero by the Indiana Veterinary Medical Association.
-
Freezin’ for a Reason
Hundreds lined up outside Hulman Center amid frigid air to participate in a warm-hearted cause.
-
Even as law, right-to-work dominates crackerbarrel
The flames of the right-to-work debate were gone, but the coals still seemed to smolder.
-
Vigo School Board to give OK on bonds for DeVaney project
The Vigo County School Board will meet at 6 p.m. Monday in the administration building, 686 Wabash Ave.
-
Bridging the gap to ‘forever’
They can be taken from their homes by strangers for reasons they may not understand, with no possessions other than the clothes they are wearing.
-
Students showcase keen problem-solving skills at Rose-Hulman
For the 16th straight year, Honey Creek Middle School students came out on top in the Wabash Valley MATHCOUNTS competition at Rose-Hulman Institute of Technology.
-
Ivy Tech to celebrate Black History Month
Ivy Tech Community College will celebrate Black History Month with a series of events at its campuses statewide.
-
Whitney Houston, superstar of records, films, dies
Whitney Houston, who ruled as pop music's queen until her majestic voice and regal image were ravaged by drug use, erratic behavior and a tumultuous marriage to singer Bobby Brown, has died. She was 48.
-
Giant welcome home for Steve
Terre Haute was suddenly home to thousands of cheering New York Giants fans Friday as residents welcomed Super Bowl champion Steve Weatherford back home for a parade.
-
‘One for Terre Haute,’ Steve tells crowd at North
“This one was for Terre Haute,” native son Steve Weatherford proclaimed Friday as he shared his Super Bowl victory with the community that helped send him on the path to a world championship.
-
Hometown support vital to success, Weatherford says
Steve Weatherford said Friday he wouldn’t be celebrating a Giants’ Super Bowl victory if not for the support he’s received from his hometown, his parents and mentors in his life.
-
Craning for a rare glimpse
A visitor from the Far East has naturalists flying to Linton, hoping some good comes from one bird’s bad directions.
-
Vigo’s primary election filings complete
The slate is set for the May 8 primary election, with the race for three at-large seats on the Vigo County Council drawing the largest pool of candidates at the county level.
-
Documentary on electric vehicles plays Sunday at Rose
The rising popularity of electric vehicles and their impact on the world eco-system is the focus of a documentary, “Revenge of the Electric Car,” being presented at 3 p.m. Sunday in Rose-Hulman Institute of Technology’s Hatfield Hall Theater.
-
Man gets 10-year sentence in battery case
A West Terre Haute man received a 10-year prison sentence Friday after pleading guilty to aggravated battery for beating a friend caught in bed with the man’s wife.
-
Asian hooded crane lands in Greene County wildlife area
Bird watchers are flocking to a southwestern Indiana wildlife area to try to catch a glimpse of a crane usually spotted only in Asia.
-
Slow drips: It’s maple syrup season in Indiana
More seasonal, colder temperatures will hit the Wabash Valley this weekend, which is ideal weather for maple syrup production, said Keith Ruble, superintendent of the Vigo County Parks and Recreation Department.
However, Ruble voices concern that this year’s maple syrup season may be short.
-
Downtown restaurant celebrates expansion
The streets of Terre Haute were chilly Thursday night, but for the glow of hot pasta inside Louise’s Pizzeria and Cafe.
-
Contract signed for new Y
Papers are signed and the ink is in place for a new YMCA to operate in Terre Haute.
-
City to impose $30 release fee on towed vehicles
The Terre Haute City Council voted without opposition Thursday to impose a new $30 release fee on vehicles towed and impounded by the police as part of a criminal investigation.
-
Valley educators cautious on Indiana’s ‘No Child’ waiver
Indiana is one of 10 states to receive a waiver from federal No Child Left Behind requirements.
-
Driver dies after Illinois school bus crash
“Brace yourself. Brace yourself,” Fay Pickering shouted to her students just before the school bus she was driving crossed U.S. 40 and landed in a ditch Thursday morning.
-
Trial date set for former WTH police chief
A July 23 trial date has been set for a former police chief of West Terre Haute accused of theft.
-
Motorcycle gang member pleads guilty in federal court
A member of an Indianapolis motorcycle gang who delivered methamphetamine to a Terre Haute dealer has pleaded guilty to drug charges in federal court.
-
July trial date set for mother charged with child neglect
A July 30 trial date has been set for a Terre Haute mother charged with neglecting and battering her toddler.
-
Business hosting SPPRAK fundraiser
Java Haute is hosting the latest fundraiser sponsored by SPPRAK — Special People Performing Random Acts of Kindness.
-
Valley high school cooking competition under way today
Clabber Girl Corp. and Gordon Food Services will host the fourth-annual High School Chef Competition, beginning today through Saturday, and again Feb. 18, in the Culinary Classroom at Clabber Girl.
- More Local & Bistate Headlines
-
Raw Video: Greek Rioting Ahead of Austerity Vote
Pop Music Superstar Whitney Houston Dies at 48
Raw Video: Whitney Houston's Last Performance
Coroner: Houston Autopsy Results Weeks Away
Reaction to Houston's Death at Clive Davis Party
Whitney Houston's Church Mourns Her Passing
Police: Houston Found Dead in Her Hotel Room
Raw Video: Child Rescued After Kosovo Avalanche
Severe Cold Wreaks Havoc in China
Fans 'Speechless' Over Houston's Death
Fuel Removal Under Way on Capsized Italian Ship
79 Turtles Seized at Shanghai Airport
Snow Strands Italian Towns
Recording Superstar Whitney Houston Dead at 48
Video of M.I.A's Obscene Halftime Gesture
Paul Suffers Narrow Loss to Romney in Maine
Palin Brings Anti-Washington Message to CPAC
Raw Video: Deadly Blasts in Syria
Stocks Fall Sharply As Greek Deal Is Held Up
Raw Video: Italy's Mount Etna Bursts Into Life
Exclusive Video: Bobbi Kristina Leaving Hospital
2012 Grammys: Rihanna
Raw Video: Aurora Borealis As Seen From Space
2012 Grammys: Taylor Swift
Exclusive Video - Whitney's Bodybag
FUEL TV: Punk Payback Gym tips
Whitney's Final Days - EXCLUSIVE
First glimpse of Blue Ivy Carter
Lusetich: AT&T Rd. 3 recap
Peek inside Barbie's closet
Romney Tops Santorum in CPAC Straw Poll
Madonna's Daughter Shaves Head
Angry Dad Shoots Teens Laptop
Absolute Lin-sanity
5 Killed in Wrong-way Crash on I-10 in La.
Test on Comforter in Powell Unit Shows Blood
Hero Driver Saves Kids From Burning Bus
Funeral to be held for Powell boys
