Manufacturing in the New York region grew in August for the first time in more than a year, reinforcing signs the worst recession since the 1930s is nearing an end.
The Federal Reserve Bank of New York’s general economic index climbed to 12.1, higher than forecast and the first expansion since April 2008, the bank said today. Readings above zero for the Empire State index signal manufacturing activity is growing.
Today’s report, one of the first regional factory measures for the month, indicates companies are restarting assembly lines after slashing inventories at a record rate. Economists project growth will resume this quarter, helped by stabilization in manufacturing and housing.
“Manufacturing is in the midst of a turnaround,” John Herrmann, president of Herrmann Forecasting in Summit, New Jersey, said before the report. “Inventories are lean relative to sales and companies will need to restock. It means orders will rise and production will rise” in coming months.