Sunday, April 4, 2010
Manufacturing grows at fastest rate since 2004
It is reported that the manufacturing growth rate reaches the fastest one since 2004. According to the news, the index of Tempe Ariz.-based Institute for Supply Management’s (ISM) manufacturing rose to 59.6 in March from the February reading of 56.5. This is driven by significant growth in new orders and production and a larger inventories, which grew for the first time in 46 months. The new orders rose to 61.5 from 59.5 the month before; the production component increased to 61.1 from 58.4; and the inventories inched higher to 55.3, which is the first time that components has posted above the 50 tipping point in 46 months. Additionally, however, some economists regard this report as a subjective and overrated survey.
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For those that view this index as valuable and an important indicator of economic growth this is seen as an early indicator of future improvement for employment. As this article states strong growth in productivity comes first and is followed by factories beginning to use more machinery and consequently more job hours are needed. This can be seen as added pressure for companies to add more people, according to this article and also what we discussed in class. So, this industry improvement can be viewed positively for those that are out of work.
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