In this day of searching for any good news on our economy, I thought this article might help pick you up. This article was published by Bernstein and discusses the most recent ISM Manufacturing Index readings.
For the first time in 18 months, the ISM index has risen above 50%, which indicates expansion. This reading provided a strong sign that the US manufacturing sector is well on the way to recovery. The article discusses that back in March they had determined that in previous cyclical downturns, the liquidity index was normally 5 months ahead of the ISM index. The current recovery is in line with these past trends and should bolster investor confidence in the rehabilitation of the US Economy.
Firms in several industries are under pressure to increase orders for two main reasons. First companies are replenishing inventory following the two largest quarters of inventory liquidation on record. Second, companies are experiencing a surge in demand from domestic and overseas customers.
In the author's view, the rise in order bookings was broad based, with 13 of 18 industries reporting growth. Moreover, the increase in business activity also included a rise in the price index, which provides concrete evidence of an industrial rebound.
Here's to hoping this trend continues and this analysis is correct.
Read the entire article HERE:
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