US manufacturing activity grows in March

A worker polishes steel in China, a leading global consumer of many commodities (AFP Photo/)

Washington (AFP) - US manufacturing activity grew for the first time in six months in March, led by a surge in new orders that suggested a turnaround in the embattled sector.

The Institute for Supply Management said its purchasing managers index for the manufacturing sector jumped 2.3 percentage points from February to 51.8 in March, above the threshold of 50 between growth and contraction.

The PMI index had been in contraction territory for five straight months.

Twelve of the 18 manufacturing surveyed reported growth in March. Thirteen of the 18 also reported an increase in new orders, pushing the new orders index up sharply to 58.3 from 51.5 in February.

Comments from purchasing managers surveyed were largely positive. "Business in telecom is booming. Fiber plant is at capacity," said a person in the chemical products sector.

"Government is spending again. Have received delivery orders," said a respondent in the transportation equipment sector.

"The data should lessen fears that 'global economic and financial developments' -- GEFD -- will cause overall US growth to slow significantly," said Jim O'Sullivan, chief US economist at High Frequency Economics.

Barclays analyst Rob Martin highlighted a rise in new exports orders to 52.0 in March from 46.5 in February, and a half point rise in imports, at 49.5.

"With the value of the dollar having moved lower since the beginning of the year and with financial stress having largely abated, manufacturing output may be returning to the modest positive trend in place before the large appreciation of the dollar between mid-2014 and late 2015," Martin said.

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