2018.03.0122:48:00UTC+00U.S. Manufacturing Index Accelerates in February

U.S. factories grew in February at its quickest rate since May 2004, which suggests that strength in manufacturing and demand remains robust, according to figures from the Institute for Supply Management.

The ISM's purchasing managers' index reached 60.8 per cent in February, a 1.7 percentage point rise from January's 59.1 reading.

Most of the 18 industries expanded in February, with just apparel, leather and allied products and furniture and related products shrinking, the report showed.

The latest advance extends a series of upbeat readings in the survey-based measure of manufacturing that is being boosted by improving global economies and strong business investment. It also comes on the heels of a late-year acceleration in consumer spending, which grew in the fourth quarter at the fastest pace in more than a year.

The report also showed factories are having some difficulty keeping up with demand. The ISM's index of order backlogs increased to a more than 13-year peak. Delivery times also lengthened in February, with a measure hitting the second-highest level since 2010. That may help explain the growth in the group's gauge of manufacturing employment, which marked its largest month-over-month gain in more than two years.

ING chief international economist James Knightley said that the level of activity reported in February “suggests that the manufacturing sector will continue to contribute significantly to economic activity in coming months.”