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Monday, January 3, 2011

Ahead of the Bell : for 2011........

Ahead of the Bell: Manufacturing index

Manufacturing index likely to show growth in December for 17th straight month

WASHINGTON (AP) -- Manufacturers likely increased output at the same pace in December as the previous month, notching the 17th straight month of growth.

The Institute for Supply Management's index of manufacturing activity is expected to remain unchanged at 56.6. Any reading above 50 indicates that the sector is growing. The ISM, a trade group of purchasing executives, will release its report on Monday at 10 a.m. EST.

The ISM's manufacturing index rose to 60.4 in April, the highest level since June 2004. The index had bottomed out at 32.5 in December 2008, the lowest since June 1980.

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Greater consumer spending could spur more factory output. Shoppers tempered their concerns about the sluggish economy this holiday season and hit the malls in large numbers. Consumer spending, excluding autos, rose in November and December by the most since 2007, according to MasterCard Advisors' SpendingPulse.

That could lead to more factory output, as stores seek to replenish their stockpiles of electronic goods, appliances, and other consumer goods.

Businesses are also stepping up their spending on computers and long-lasting industrial machinery. That should also boost factory output.

The ISM surveys purchasing managers at about 350 companies around the country to compile the index
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