- The Washington Times - Monday, December 1, 2003

ASSOCIATED PRESS

The nation’s manufacturing sector expanded in November for a fifth consecutive month and at its fastest rate in nearly two decades, while October construction spending was the best month on record.

“We’re clearly coming out of the woods,” Sung Won Sohn, chief economist at Wells Fargo in Minneapolis, said yesterday in response to the reports.

The Institute for Supply Management reported that its manufacturing index soared last month to its fastest clip since December 1983. The index registered 62.8, an increase from the October reading of 57 and well above analysts’ expectations of 58.1.

An index reading above 50 indicates expansion; one below 50 indicates that manufacturing activity is contracting.

Economists said the most encouraging detail in the manufacturing report was an employment increase — the first time the industry has added jobs in more than three years.

“If factory employment is starting to improve — and that has been one of the toughest nuts to crack — then we are likely to see growth across all sectors,” said Douglas Porter, senior economist at Nesbitt Burns Securities of Chicago. “That is truly an encouraging result.”

Also yesterday, the Commerce Department reported that the total value of building projects under way came in at a seasonally adjusted $922 billion in October, a 0.9 percent increase from the previous month.

The $922 billion level was an all-time monthly high, and the percentage change from the previous month was better than the 0.6 percent rise that analysts were forecasting.

The strength in construction was broad-based, with spending by private builders on residential construction and spending by government on public works projects each posting the highest monthly level on record.

Spending by private builders on residential projects grew by 2.2 percent in October to $484 billion. Those gains helped offset cutbacks in spending on other types of construction, including factories and hotels and motels.

Spending by government on major public works projects increased by 1.2 percent to $224.7 billion. Stronger spending on schools, health-care buildings and transportation facilities helped to blunt weaker spending on highways and streets and public safety facilities.

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