Manufacturing Expands for 12th Consecutive Month

Washington, DC, Aug. 3, 2010--The Institute for Supply Management said Monday its manufacturing index declined in July, to 55.5 from 56.2 in June, although the reading still indicates that manufacturing is expanding.

It was the 12th consecutive month of readings above 50.

At the bottom of the recession, the index was closer to 30.

Measures of production and new orders, which signal future business, both grew again, although more slowly than in June. And more manufacturers said they were willing to hire people.

The report, which comes out on the first business day of the month, surveys production managers at about 400 companies around the country, makers of products ranging from furniture and computers to food and tobacco.

Manufacturing growth has cooled for the past three months, but most of that was expected.

Manufacturing accounts for about 20% of U.S. economic activity.

The July report suggests that manufacturing will grow for the rest of the year, and more quickly than the broader economy.

Businesses are investing more money on equipment and software, instead of new workers.