By Bob Willis
Jan. 4 (Bloomberg) -- U.S. manufacturing expanded in December at the fastest pace in more than three years, capping a late-2009 global factory rebound that helped pull the world out of the worst slump since the 1930s.
The Institute for Supply Management’s factory index rose to 55.9, the highest level since April 2006, according to the Tempe, Arizona-based group. Readings greater than 50 signal expansion. Construction spending dropped for a seventh month, the Commerce Department said in a separate release.
Stocks rallied worldwide as reports showed the improvement at U.S. factories is being accompanied by strength in European and Chinese manufacturing. A stimulus-driven rebound in global demand is boosting orders that will encourage producers to ramp up output and fuel a self-sustaining recovery.
“There is a broad-based global manufacturing recovery occurring right now,” said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York. Maki was the No. 1 forecaster of economic growth from January through September in a Bloomberg News survey. “Manufacturing was picking up speed as we moved into the end of 2009, and we expect growth will be picking up further.”
In Europe, manufacturing grew in December at the fastest clip in 21 months. An index based on a survey of purchasing managers in the 16-nation euro area rose to 51.6 from November’s 51.2, London-based Markit Economics said. Readings higher than 50 indicate growth.
Chinese factories in December had their fastest growth in five years. A purchasing managers’ index rose to 56.1, HSBC Holdings Plc and Markit Economics said in an e-mailed statement. The measure of factories in the world’s third-largest economy is based on a survey of more than 400 manufacturers.
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http://www.bloomberg.com/apps/news?pid=20601087&sid=ae6zK6TPK68I&pos=1
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