U.S. factories expanded in February at the fastest rate since May 2004, indicating sustained strength in manufacturing as demand remains solid, figures from the Institute for Supply Management showed Thursday.
The latest advance extends a series of healthy readings in the survey-based measure of manufacturing that’s being fueled by improving global economies and firm business investment. It also comes on the heels of a late-year pickup in consumer spending, which advanced in the fourth quarter at the fastest pace in more than a year.
“All indications are that demand will continue to grow,” Timothy Fiore, chairman of ISM’s factory survey committee, said on a conference call with reporters. “There are a number of issues going on here in the supply chain that’s pushing things up. The net result is there are problems in inventories, which are growing.”
In addition to firmer overseas and domestic sales, corporate optimism is getting a lift from the recent tax-cut law and reduced regulation.