The National Association of Purchasing Management-Chicago said today its business barometer rose to 48.2 in March from a six-year low of 44.5 a month earlier. Figures lower than 50 signal contraction.
The gain may help ease concern that businesses investment would plummet as soaring fuel costs and slowing sales hurt profits. Orders from overseas may help American factories cope with the loss in domestic demand as stricter lending rules restrict access to credit.
``The manufacturing sector is being in part supported by exports, but exports can only partially offset the weakness in the economy,'' Zach Pandl, an economist at Lehman Brothers Holdings Inc. in New York, said before the report.
Economists forecast the measure would rise to 46, according to the median of 58 projections in a Bloomberg News survey. Estimates ranged from 39.3 to 50.
The production gauge in today's report increased to 50.4 from 46.5, the report said. The employment index rose to 44.6 from 33.5, which was the lowest since January 2002, the group said.
A measure of prices paid for raw materials increased to 83.9 from 79.4 the previous month.
Orders Rise
The Chicago report's measure of new orders improved to 53.9 from 48.8 the prior month. Order backlogs dropped to 36.8 from 38.3. The group's inventories index fell to 42 from 46 in February.
The Chicago purchasers' group surveys companies with U.S. and worldwide operations. Any group member, even those not located in the Midwest, can respond to the survey.
Economists watch the Chicago index for an early reading on the outlook for overall U.S. manufacturing, which makes up about 12 percent of the economy.
The Institute for Supply Management is scheduled to release its national manufacturing survey tomorrow. Economists surveyed by Bloomberg News forecast that measure fell to 47.5, the lowest level in almost five years, from 48.3.
Other reports this month have shown manufacturing contracted in March. The Federal Reserve Bank of Philadelphia's general economic index registered a reading of minus 17.4 for the month, and the New York Fed's measure was minus 22.3, the lowest level since record-keeping began in 2001.
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