U.S. factory activity picks up, more gains eyed as winter fades
By Lucia Mutikani
WASHINGTON (Reuters) - U.S. factory activity rose in March, with production posting its biggest increase since the recession ended in the latest indication the economy was regaining its footing after a brutal winter.
An unusually cold and snowy winter chilled activity early in the year and signs of a thaw should boost hopes of a strong bounce back in economic growth in the second quarter.
"Winter is over. The economy is looking more positive today and overall business conditions continue to show improvement," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.
The Institute for Supply Management said on Tuesday its index of national factory activity rose to 53.7 last month from a reading of 53.2 in February.
Though it was below economists' forecast for a 54.0 reading, March marked the second month of gains. Readings above 50 indicate expansion in the sector, which accounts for about 12 percent of the economy.
Activity was buoyed by a 7.7 percentage point rebound in the production index after it showed contraction in February. The increase was the largest since June 2009, just as the recession was ending.
The forward-looking new orders index rose to 55.1 from 54.5 in February.
There was also a surge in order backlogs and export orders. Fourteen of the 18 manufacturing industries reported growth. Continued...