WASHINGTON (AP) — U.S. manufacturing grew in November at the fastest pace in 2½ years as factories ramped up production, stepped up hiring and received orders at a healthy clip.
The Institute for Supply Management said Monday that its index of manufacturing activity rose to 57.3. That was up from 56.4 in October and was the highest since April 2011. A reading above 50 signals growth.
One component of the index, a measure of hiring, rose to its highest level in nearly 18 months. And a gauge of export orders reached its highest level in nearly two years. Overseas demand is benefiting from modest recoveries in Europe, Japan and China.
The ISM is a trade group of purchasing managers.
Manufacturing activity has now expanded for six straight months after hitting a rough patch in the spring. The steady gains suggest that growth is remaining solid in the current October-December quarter.
And U.S. builders increased construction spending in October at the fastest pace in more than four years, a separate report on Monday showed. Government spending on public projects drove the increase. By contrast, spending on home construction fell.
Still, the encouraging figures in the ISM’s report conflict with weaker recent data on factory activity, making it difficult to discern a clear trend.
“We continue to believe that this indicator is overstating the health of the broader economy,” said Joshua Shapiro, chief U.S. economist at MFR Inc.
For example, businesses cut back on orders for long-lasting factory goods in October, according to a government report Wednesday. Orders for durable goods, which are meant to last three years, fell 2 percent.