WASHINGTON — U.S. manufacturing activity in April posted its best showing since September, when the financial crisis erupted. The performance was driven by a rise in new orders reflecting higher business and consumer spending.
The strength in forward-pointing new orders was especially encouraging. It indicated that after slashing inventories in the first quarter, manufacturers see the need to place new orders for other businesses and consumers.
More orders signal that higher consumer spending — which accounts for about 70 percent of economic activity — is causing businesses to boost demand. Such spending is crucial to an economic recovery.
The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index rose to 40.1 in April from 36.3 in March. While anything below 50 indicates manufacturing is contracting, 40.1 was the highest level since September.
Experts cautioned that manufacturers, particularly in the auto industry, still face serious troubles. And the overall economy, as measured by the gross domestic product, contracted at a 6.1 percent rate in the first three months of this year after a 6.3 percent fall in the fourth quarter, the worst back-to-back readings in a half-century.
They said the most positive view of the April report is that the deep slide in manufacturing that occurred last fall could be nearing an end.
“This is another sign that the depth and speed of the economic decline seems to be leveling off,” said Stuart Hoffman, chief economist at PNC Financial in Pittsburgh.
