Today’s ISM report showed a measure of U.S. production increased to 57.6 from 53.6 in January. The new orders measure climbed to 57.8, the highest since April 2011, from 53.3, and the gauge of export orders advanced to 53.5, the highest since May 2012, from 50.5.
The index of prices paid rose to 61.5 from 56.5 last month.
The measure of orders waiting to be filled increased to 55 from 47.5. The inventory index was little changed at 51.5 after 51, while a gauge of customer stockpiles fell to 46.5 from 48.5. A measure of supplier deliveries decreased to 51.4 from 53.6.
The employment index dropped to 52.6 from 54 the prior month.
Recent regional reports show manufacturing, which accounts for about 12% of the U.S. economy, made gains last month. The Federal Reserve Bank of New York’s general economic index, which covers New York, northern New Jersey and southern Connecticut, unexpectedly expanded in February at the fastest pace in nine months. A report yesterday from MNI Chicago showed that business activity expanded in February by the most since March.
Investment in new equipment is at the root of the recent pickup in increased activity on factory floors. Orders for capital goods, excluding military gear and aircraft, have climbed 9.5% since October, the biggest three-month gain since 1993, according to Commerce Department figures released earlier this week.
Applied Materials, the largest producer of chipmaking equipment, forecast fiscal second-quarter sales that beat most estimates, indicating that some customers are expanding output on brisk demand for mobile devices.
Sales in the period will rise 15% to 25% from the prior quarter, the company said in a statement Feb. 13, indicating revenue of $1.81 billion to $1.97 billion. Analysts on average estimated sales of $1.81 billion, according to data compiled by Bloomberg.
“The momentum in the business is strong,” Michael Splinter, chief executive officer at the Santa Clara, California-based company, said at a conference the following day. “Our display business is starting to come back. Orders are picking up there as well.”
Consumer demand for motor vehicles is bolstering business for U.S. producers as well. Personal spending rose 0.2% in January after a 0.1% gain the prior month, Commerce Department figures showed today.
Cars and light trucks sold at a 15.2 million annual rate in January after 15.3 million a month earlier, according to Ward’s Automotive Group. November through January were the strongest three months of the auto industry in five years.