An index of manufacturing activity retreated from a 2-1/2-year high in March amid modest declines in new orders and production, but a surge in manufacturing jobs indicated that the sector’s energy-led recovery was gaining momentum.
Other data on Monday showed construction spending rising to a near 11-year high in February amid robust gains in home building investment. The reports pointed to strong economic fundamentals, despite growth appearing to have slowed sharply in the first quarter.
The Institute for Supply Management (ISM) said its index of national factory activity slipped to a reading of 57.2 last month from 57.7 in February, which was the highest since August 2014.
A reading above 50 indicates an expansion in manufacturing, which accounts for about 12 percent of the U.S. economy. The manufacturing recovery is being driven by the energy sector as steady increases in crude oil prices boost drilling activity.
A report from energy