Despite a contraction of the U.S. economy during the first quarter, a new report on manufacturing should provide some hope of recovery to producers of farm equipment, construction equipment and other manufacturers.
The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index rose to 40.1 in April from 36.3 in March. Analysts said the increase beat expectations and showed a slower-than expected contraction.
Also, as new orders increased, inventories shrank for a 36th straight month. Economists said the shrinking of inventories means there will be pent-up demand for future production that will stimulate the economy.
A reading below 50 on the purchasing index indicates a contraction, but an economist told the Associated Press that the April reading is the highest mark it has achieved since September of last year.
"Though the reading is well below the magical 50 level which points to growth, it is the highest mark since September 2008, which is when the sky fell in," the economist said.
The index hit a 28-year low in December, the Associated Press reported.