NEW YORK Manufacturing grew in January at its fastest pace in nine months and looked likely to drive economic growth in the first three months of 2013, an industry survey showed on Friday.
Financial data firm Markit said its U.S. Manufacturing Purchasing Managers Index rose to 55.8 last month, its best showing since April, from 54.0 in December.
A reading above 50 indicates expansion.
Firms tied the surge to a steady rise in domestic demand; the survey's new orders component rose to 57.4, its highest since May, 2010. The output component rose to 56.8 from 54.5 in December. January's reading was the highest in 10 months.
Markit chief economist Chris Williamson called it "a good start to 2013" and said the survey "suggests the underlying health of the industrial sector continues to improve and rising production will help the economy return to growth in the first quarter, providing there are no set-backs in coming months."
Government data earlier this week showed the U.S. economy contracted in the fourth quarter for the first time since recession ended three years ago, but that consumer spending and business investment rose.
But the economy would have grown at a healthy 2.5 percent clip were it not for slower inventory growth, a plunge in defense spending and the effects of Superstorm Sandy, which hit the East Coast in October.
Williamson said stronger demand from China and Germany in January should also improve the U.S. trade balance, another factor likely to contribute to stronger first-quarter growth.
"In all, the survey points to the U.S. industrial sector acting as a key driver of the global economic upturn that has been evident in recent months and suggests that any fears of a double-dip recession in the U.S. are overplayed," he said.
(Reporting by Steven C. Johnson; Editing by Chizu Nomiyama)