The Institute for Supply Management’s factory index rose to 54.9 in April from the prior month’s 53.7, the largest expansion this year, the Tempe, Arizona-based group’s report showed May 1.
The median forecast of economists surveyed by Bloomberg News called for 54.3. Readings above 50 indicate expansion.
“It’s a sign the broader economy is doing well,” said Robert Stein, deputy chief economist at First Trust Portfolios. “Consumers have more purchasing power to buy goods such as appliances,” and “business spending on equipment should accelerate.”
The gain in the factory index was broad-based, with 17 of 18 industries reporting growth in April. Manufacturing accounts for about 12% of the economy.