U.S. manufacturing grows at fastest pace since June

U.S. manufacturing grew last month at the fastest pace in nearly a year, as new orders, production and a measure of employment all rose. The Institute for Supply Management, a trade group of purchasing managers, says its index of manufacturing activity increased to 54.8 in April. That’s the highest level since June, and up from 53.4 the previous month. Readings above 50 indicate expansion. The report exceeded analysts’ expectations, prompting investors to shift money out of bonds and into stocks. The Dow Jones industrial average rose 80 points in morning trading. A measure of new orders jumped to its highest level in a year. That could point to faster production in the coming months. New export orders also rose, which could offset worries that Europe and China could drag on exports. Factories have been a key source of jobs and growth since the recession ended almost three years ago. The sector has expanded for 33 straight months, according to the ISM’s index. Factories account for only about 9% of total payrolls but added 13% of the new jobs last year. Manufacturers have added 120,000 jobs in the past three months, about one-fifth of all net gains. Other reports on manufacturing have been less positive. Factory output fell in March, the Federal Reserve reported last week. Companies made fewer electronic products and cut back on steel and other metals. Business investment is also slowing. Companies increased their spending on equipment and software at the slowest pace in nearly three years in the January-March quarter.