Your Economy (No Politics)

[Bullwinkle]

U.S. ISM Manufacturing Index Fell to 55.2 in March From 56.7
Courtney Schlisserman in Washington

April 3 (Bloomberg) -- U.S. manufacturing growth unexpectedly slowed in March, suggesting companies are scaling back production in the face of cost pressures.

The Institute for Supply Management's factory index fell to 55.2 last month from 56.7 in February. Readings above 50 indicate expansion.

The report suggests the pace of businesses investment is slowing after an acceleration in the last four months of 2005. Corporate spending is key to economic growth this year as the housing market declines and consumer spending slows.

``Manufacturing activity is pretty strong right now though it's not explosive,'' Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut, said before the report. ``Economic growth is going to continue to be strong in the second quarter and then gradually decelerate throughout the year.''

Economists expected the index to rise to 57.7, the median of 65 forecasts in a Bloomberg News survey. Estimates ranged from 52 to 60.

Similar surveys showed that manufacturing in the dozen nations sharing the euro expanded at the fastest pace in more than five years in March and Japan's largest companies plan to increase investment.

An index based on a survey of about 3,000 European purchasing managers rose to 56.1, the highest since September 2000, from 54.5 in February, NTC Research Ltd., which compiles the measure for Royal Bank of Scotland Group Plc., said today. Large Japanese companies plan to lift spending 2.7 percent this year, the Bank of Japan's quarterly Tankan survey showed.

The ISM, based in Tempe, Arizona, surveys more than 400 companies in 20 industries, including clothing, printing, transportation, furniture and plastics to compile its index.

http://www.bloomberg.com/apps/news?pid=10000103&sid=a9cG55xOABkk&refer=us