NEW YORK (AP) _ Manufacturing activity rose in August for the 15th consecutive month, but at a slower rate than in July, according to a monthly report released Wednesday by the Institute for Supply Management, a research group.
The ISM's index for manufacturing activity stood at 59 percent in August, 3 percentage points below the 62 percent recorded in July and just below the level that analysts were expecting.
Nonetheless, the survey, together with a separate report showing that construction spending hit an all-time high in July, painted an overall positive picture for the economy and suggested that despite some bumps the economic expansion remained solid.
Any reading in the ISM index above 50 means that manufacturing is expanding, while below 50 means activity is contracting. The index has been above 50 since June 2003.
Overall, the ISM report indicated healthy activity in the manufacturing sector, while showing some weak spots such as concerns among manufacturers over rising energy costs, higher prices for basic materials, especially steel, and slowing growth in sales.
``August was another good month for the manufacturing sector,'' Norbert Ore, who directs the monthly survey for the ISM, said in a statement. He said that while the rate of growth slowed in the month, he described overall conditions for U.S. manufacturers as ``still quite positive'' as both new orders and production levels remain high.
Ore said many businesses are still rating their businesses as ``strong,'' while some of beginning to see a new orders taper off. He attributed a growth in inventories as part of a catch-up strategy to meet higher sales demand.
Treasury bonds, which are highly sensitive to reports on economic data, gave back early gains in trading on Wednesday, indicating that investors did not see the report as suggesting a significant slowdown in economic activity. On Wall Street, stocks were slightly higher in morning trading.
Separately, the Commerce Department reported that construction spending bounced back in July to the highest level on record. Following a lull in June, the spike in July meant that the value of buildings put in place came in at a seasonally adjusted annual rate of $997.2 billion, an all-time high level and a 0.4 percent increase over June.
The gains were broadly based, with spending by private builders on residential units and spending by government on big public works projects each coming in at all-time highs in dollar terms.
The manufacturing report is compiled every month by the Tempe, Ariz.-based ISM group, and compiles information on orders, pricing and other data on commonly used manufacturing supply materials such as steel, aluminum, gasoline, cardboard, latex and lumber.
The ISM also reported that its employment index, a measure of job strength in manufacturing, edged down 1.6 percent to 55.7 percent in August. That indicates that manufacturing employment is still growing, but at a slower pace than in July.
The ISM reported that prices for supplies were moving higher as demand from customers and energy costs rose. Indicators for new orders as well as imports both grew in August, and the number of backlog orders also increased.
Among the industries reporting growth in August were rubber makers, furniture manufacturers, food makers, textiles, paper and electronics.