.S. manufacturing activity grew for the first time in five months in June, thanks to strong exports, but the minimal growth came as inventories climbed and prices rose for every commodity except copper, a private industry group said on Tuesday.
The reading of 50.2 from the Institute for Supply Management was up from 49.6 in May. It beat economists' prediction of a reading of 48.7, according to the consensus estimate of Wall Street economists surveyed by Thomson Financial/IFR. A reading above 50 signals growth.
The prices paid index reached 91.5, up from 87 in May. It was the index's highest reading since 1979.
For the previous four months, the overall index had hovered near its lowest level in five years.
Manufacturers are "experiencing higher prices for their inputs while demand for their products is slowing," Norbert J. Ore, chairman of ISM's manufacturing business survey committee, said in a statement accompanying the report.
The weak dollar and robust growth in Europe boosted exports, which were the main factor in the sector's growth.
"The domestic side is fundamentally weak," said Leo Kamp, chief economist at TIAA-CREF.
Higher energy prices are "going to end up pretty much destroying a lot of demand," said Bob Steder, operations manager at Farmers Factory, a manufacturer of plows, pallet forks and bale movers based in Cedar Rapids, Iowa.
07/01/2008 10:36 AM
By ELLEN SIMON
AP Business Writer
NEW YORK
.S. manufacturing activity grew for the first time in five months in June, thanks to strong exports, but the minimal growth came as inventories climbed and prices rose for every commodity except copper, a private industry group said on Tuesday.
