US Factories Show Momentum Heading Into 2014

The Wall Street Journal

U.S. manufacturers expanded at a slightly slower but still-healthy pace in December from the prior month, according to a closely watched measure of activity in the sector.

The Institute for Supply Management’s monthly index, which is based on a survey of purchasing managers, hit 57 in December. That was down slightly from 2013’s high of 57.3, registered in November. Readings above 50 indicate expansion.

This is indeed excellent news.  Bank lending is still tight, particularly to small- and mid-sized businesses, and it may not loosen any time soon.  The effect has been to reduce the access to capital that businesses can spend on expansion.  Expansion can be in larger facilities, new equipment, or additional inventory to feed an increase in production.

Granted, this is an aggregate assessment of manufacturing as a whole, in the United States.  Different industries are experiencing different recoveries.  Overall, a trend of growth in some sectors should only help strengthen and move the rest of the economy forward.