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January 3, 2007 2:00 PM, EST

ISM Manufacturing Index Rebounds from Contraction

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The Institute for Supply Management said Wednesday its manufacturing index for December rose to 51.4 from a 49.5 reading, which had been the first contraction in more than three years.ISM readings above 50 indicate growth and below 50 show contraction. The index measures U.S. manufacturing activity.“Manufacturing proved resilient in December, as the [index] returned to growth registering 51.4 percent after a decline in November,” said Norbert Ore, chairman of ISM’s manufacturing survey committee.“Both the new orders and production made significant gains to drive the index back above the breakeven point,” he said in a statement.The new orders index rose 3.4 to 52.1, while production rose 3.3 to a 51.8 reading.The prices paid index fell 6 points to 47.5, while an employment gauge rose 0.5 to 49.7.