ISM Manufacturing Index Show Additional Expansion

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he Institute for Supply Management said Monday its factory index in October showed expansion for the fourth straight month.

ISM said its index rose to 57 in October, the highest since January 2000, from 53.7 in September. Readings above 50 indicate expansion.

Higher manufacturing activity can increase the demand for freight transportation to deliver new goods.

"This is the best report that we have seen in quite some time in terms of the overall strength of manufacturing," Norbert Ore, ISM chair, said in a statement.

Economists had expected a reading of 56 in the factory index, Bloomberg reported.

The new orders index, which accounts for about a third of the total, jumped to 64.3 from 60.4 in September. That's the highest since June 1994.

The production index, a gauge of work being performed, rose to 62.6, the highest since July 1997, from 57.3.

The index of inventories rose to 44.5 from 42.7, indicating inventories are being run down at a slower pace.

ISM surveys more than 400 companies in 20 industries, including clothing, printing, transportation, furniture and plastics. Manufacturing accounts for about one- seventh of the economy.