[h=3]By KATHLEEN MADIGAN[/h] The U.S. manufacturing sector expanded in September, ending three months of contraction, according to data released Monday by the Institute for Supply Management.
The ISM's manufacturing purchasing managers' index edged up to 51.5 last month from 49.6 in August, which had been the third consecutive reading below 50. A reading below 50 indicates contracting activity.
Economists surveyed by Dow Jones Newswires expected the latest PMI to come in at 49.5.
"Comments from the panel reflect a mix of optimism over new orders beginning to pick up, and continued concern over soft global business conditions and an unsettled political environment," the report said.
The U.S. index came in better than the weak reports from other global factory sectors. Still, the factory sector worldwide is struggling.
Good news within the U.S. ISM survey was the rebound in demand. The new-orders index rose to 52.3 from 47.1 in August. The exports index edged up to 48.5 from 47.0.
The production index continued to shrink, although it improved to 49.5 from 47.2. The employment index rose to 54.7 from 51.6.
More manufacturers reported increased cost pressures, including prices for corn and corrugated boxes. The ISM's prices index increased to 58.0 from 54.0 in August. The price index was a low 39.5 as recently as July.
Meanwhile, spending on construction projects slipped for the second straight month in August, even as private residential building reached its highest level in more than three years, showing the uneven nature of the sector's recovery.
Construction spending fell 0.6% in August to a seasonally adjusted annual rate of $837.09 billion as commercial and industrial building slipped, the Commerce Department said Monday.
The drop, which was the biggest in more than a year, was unexpected. Economists surveyed by Dow Jones Newswires had forecast that spending would be up 0.4%.
Revised data showed construction outlays fell 0.4% in July to a rate of $842.02 billion.
Still, year over year, construction spending was up 6.5% in August.
Private residential construction jumped 0.9% from July to $273.47 billion—the highest level since January 2009.
Home building has been a bright spot for the economy of late. In August, new-home sales stayed near their highest level since 2010 and were up 27.7% from a year earlier, according to a separate Commerce report last week.
But private nonresidential building has been weak, falling for three straight months. In August, it decreased 1.7% to $288.73 billion. Construction of offices, factories and power and communication infrastructure all fell.
For the month, total private-sector construction spending fell 0.5% to $562.20 billion.
State and local governments decreased building by 0.9% in August to $249.68 billion as transportation and education construction spending were down from the prior month. Federal construction was up 0.3% to $25.21 billion.
—Eric Morath and Tom Barkley contributed to this article.
The ISM's manufacturing purchasing managers' index edged up to 51.5 last month from 49.6 in August, which had been the third consecutive reading below 50. A reading below 50 indicates contracting activity.
Economists surveyed by Dow Jones Newswires expected the latest PMI to come in at 49.5.
"Comments from the panel reflect a mix of optimism over new orders beginning to pick up, and continued concern over soft global business conditions and an unsettled political environment," the report said.
The U.S. index came in better than the weak reports from other global factory sectors. Still, the factory sector worldwide is struggling.
Good news within the U.S. ISM survey was the rebound in demand. The new-orders index rose to 52.3 from 47.1 in August. The exports index edged up to 48.5 from 47.0.
The production index continued to shrink, although it improved to 49.5 from 47.2. The employment index rose to 54.7 from 51.6.
More manufacturers reported increased cost pressures, including prices for corn and corrugated boxes. The ISM's prices index increased to 58.0 from 54.0 in August. The price index was a low 39.5 as recently as July.
Meanwhile, spending on construction projects slipped for the second straight month in August, even as private residential building reached its highest level in more than three years, showing the uneven nature of the sector's recovery.
Construction spending fell 0.6% in August to a seasonally adjusted annual rate of $837.09 billion as commercial and industrial building slipped, the Commerce Department said Monday.
The drop, which was the biggest in more than a year, was unexpected. Economists surveyed by Dow Jones Newswires had forecast that spending would be up 0.4%.
Revised data showed construction outlays fell 0.4% in July to a rate of $842.02 billion.
Still, year over year, construction spending was up 6.5% in August.
Private residential construction jumped 0.9% from July to $273.47 billion—the highest level since January 2009.
Home building has been a bright spot for the economy of late. In August, new-home sales stayed near their highest level since 2010 and were up 27.7% from a year earlier, according to a separate Commerce report last week.
But private nonresidential building has been weak, falling for three straight months. In August, it decreased 1.7% to $288.73 billion. Construction of offices, factories and power and communication infrastructure all fell.
For the month, total private-sector construction spending fell 0.5% to $562.20 billion.
State and local governments decreased building by 0.9% in August to $249.68 billion as transportation and education construction spending were down from the prior month. Federal construction was up 0.3% to $25.21 billion.
—Eric Morath and Tom Barkley contributed to this article.