U.S. manufacturing gains traction

There are growing signs that the U.S. economic growth is poised to do well this fall. One of them is the rise in the Institute of Supply Management (ISM) manufacturing index whose reading crossed 50 in September, rising from 49.6 to 51.5, according to a Desjardins Group report.

Read: Canadian manufacturing remains stable

Having remained below 50 for three straight months, the September figures offer much-needed relief to the industry. “The rise by the ISM manufacturing index is clearly good news, putting an end to a string of disappointing results,” says the report.

And while “the size of the jump is not outstanding,” the study says “its level—the highest since May—is encouraging.”

Read: Canadian economy beats forecasts

It also contains good news for business investment. “The fact that most of the sub-indexes are up is also a very good sign. Particularly nice is the comeback by new orders.”

The study regards the ISM’s only weak spot, inventories, as “good news” given that “improved orders combined with low inventories usually leads to faster production.”

Stronger U.S. job data, it adds, is also reassuring for the “surge suggests that the sector has stopped laying people off.”

Read: U.S. jobless claims drop sharply

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.