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U.S. manufacturing grows in December

January 4, 2010 |  9:30 am


The nation’s manufacturing sector in December was at its most active since 2006, continuing several months of steady gains, according to a report today.

The Institute for Supply Management, a trade group of supply executives, said its manufacturing index rose to 55.9 in December after hitting 53.6 in November in the fifth straight month of increases since August. Kicking off the first trading day of the year, the stock market leaped up this morning, helped along as oil prices flitted around $81 a barrel.

A reading above 50 represents growth, according to the institute. The December number expanded at the fastest pace for the index since reaching the 56 point in April 2006. The index has followed a general upward trend since bottoming at 32.9 in December 2008.

The overall economy also grew last month for the eighth consecutive month as indexes for production, employment, prices and more continued to rise. New orders increased for the sixth month in a row, up to 65.5 from 60.3 in November.

Even more gains could be on the way as manufacturers’ customers continue to report plunging inventories and turn to new production instead of a merchandise backlog to fill orders and feed sales.

Of the 18 manufacturing industries included in the index, nine reported growth, including apparel, petroleum and coal, computers and electronics, machinery, transportation equipment, furniture and food.

The seven industries that slipped include wood products, chemical products, plastics and rubber, and printing, which blamed factors such as tight capital and stagnant production.

But around the world, other manufacturing indexes were showing signs of promise. The Chinese manufacturing market swelled to 56.1 in December from 55.7 in November, representing the second-fastest improvement to date and the ninth consecutive month of growth in new orders and output, according to the HSBC China Manufacturing Purchasing Managers Index.

The index for 16 European countries hit a 21-month peak in December, with the boom led by Germany and France and a strong investment goods sector, according to data from research firm Markit Economics. The index went up to 51.6 from 51.2 in November, the highest level since March 2008.

Britain reached a 25-month high of 54.1, a marked increase from November’s 51.8.

-- Tiffany Hsu

Photo: Workers unload an A320 lipskin off a 2,500-ton press at McStarlite Co. in Harbor City. Credit: Irfan Khan / Los Angeles Times