The U.S. factory sector's expansion slowed a bit in
September from its breakneck pace in August, with manufacturers focused on
boosting output with only modest hiring. The Institute for Supply Management
said Wednesday its manufacturing index, based on a survey of purchasing
managers, slipped to 56.6 last month from an August reading of 59, which had
been the highest since March 2011. A figure over 50 indicates expanding
activity for the sector.
Manufacturers are benefiting from steady growth across the
U.S. economy as better household finances and a pickup in commercial building
boost demand for manufactured products. Still, a key gauge of employment in the
ISM survey pulled back during the month. That suggests high levels of new
orders and production may not translate into stronger hiring of factory
workers.
Winzeler Gear Inc., a manufacturer of plastic gears used
mainly in vehicles, has seen sales grow 15% this year thanks to the surge in
U.S. car buying. Despite the gain in sales, the company has added only four
workers this year, and production increases have come mainly over time from
boosting productivity through automation.
That is a complaint echoed by other manufacturers. The ISM
survey said some respondents noted the shortage of labor as a detriment to
business.
The furniture industry was one of the 15 industries out of
18 in the ISM survey to report output growth in September. Increased production
is being driven by the rise in new orders booked over the summer. The ISM new
orders index stood at 60 or better from July through September, a sign of solid
demand. ISM members report even export orders are still growing, shrugging off
other signs of a soft global economy.
Business spending has been a laggard in this expansion. An
increase in equipment investment will provide a welcome contribution to
economic growth.
Apogee Enterprises Inc. has benefited from the revival
in large construction projects. The Minneapolis-based company makes and
installs energy-efficient architectural glass for office and luxury apartment
buildings. With its existing facilities operating above 75% of capacity, Apogee
in November will start reopening a Utah plant that was closed in 2013.
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