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Washington - Manufacturing expanded at a faster pace than projected in February, a sign the industry was beginning to overcome bad weather across much of the United States.
The Institute for Supply Management's manufacturing index rose to 53.2 last month from 51.3 in January, the Tempe, Ariz.-based group reported Monday. Readings above 50 signal expansion. The median forecast of 81 economists surveyed by Bloomberg was 52.3.
A gain in orders showed companies were gaining confidence that demand will pick up from a weather-related lull that slowed the economy at the start of the year. The pace of manufacturing will depend on consumers' willingness to spend, growth in overseas markets and the appetites of businesses to invest in new equipment.
"We see solid capex spending this year as businesses begin to put money to work," Brett Ryan, an economist with Deutsche Bank Securities Inc. in New York, said before the report. "What you've seen over the past couple quarters has been solid pickup in private-sector spending. Final private demand has been growing at a solid pace and that will feed on itself over time."
Estimates in the Bloomberg survey ranged from 49.5 to 55. Manufacturing accounts for about 12 percent of the economy. The ISM's factory gauge averaged 53.9 for all of last year.
Another report Monday showed consumer spending climbed more than forecast in January, reflecting the biggest increase in services in over 12 years as Americans began to enroll for health insurance. Household purchases, which account for almost 70 percent of the economy, rose 0.4 percent after a 0.1 percent gain the prior month that was smaller than previously estimated.
The ISM's gauge of new orders increased to 54.5 from 51.2, while the production index fell to 48.2, the weakest since 2009, from 54.8. A measure of orders waiting to be filled rose to 52 from 48.
The employment index held at 52.3 in January. The inventory index climbed to 52.5 from 44, while a gauge of customer stockpiles increased to 46.5 from 44. A measure of export orders decreased to 53.5 from 54.5. The index of prices paid was little changed at 60 after 60.5.