(Reuters) - The U.S. manufacturing sector expanded in February at its fastest rate since November, after notching its lowest reading in a year in the prior month, an industry report showed on Friday.
Financial data firm Markit said its preliminary or “flash” U.S. Manufacturing Purchasing Managers Index rose to 54.3 in February, up from the January’s final reading of 53.9. Economists polled by Reuters had expected a 53.6 reading.
A reading above 50 signals expansion in economic activity.
This month’s output subindex rose to 56 from January’s 55.7 final reading, its second straight monthly increase and best reading since October, while the employment subindex dipped to 51.7 from last month’s 53.4. It was the slowest rate of factory employment growth since July, according to the report.
Input prices contracted for a second consecutive month.
“Factory output growth ticked higher for a second successive month in February, suggesting the goods-producing sector is on course to make a robust contribution to the economy in the first quarter,” said Chris Williamson, chief economist at Markit, in a statement.
“However, the rate of growth remains well down on last year’s peaks, and a slowing of new orders growth to the weakest for just over a year looks to have caused employers to take a more cautious approach to hiring. Worries over Russia and the eurozone also continue to dampen risk appetite.”
Markit’s “flash” reading is based on replies from about 85 percent of the U.S. manufacturers surveyed.
Reporting by Chuck Mikolajczak, Editing by Chizu Nomiyama