The nation’s manufacturing sector expanded at its fastest clip in nearly 20 years in November, its fifth consecutive month of growth, boding well for the overall economy in the final quarter of the year.
The Institute for Supply Management reported Monday that its manufacturing index rose to 62.8 last month from 57 in October.
An index reading above 50 indicates expansion; one below 50 indicates that manufacturing activity is contracting. From March through June, the manufacturing index was below 50.
The November reading was well above the 58.1 that analysts had expected.
Economists were particularly upbeat that the report showed an increase in employment for the first time in more than three years.
“If factory employment is starting to improve — and that has been one of the toughest nuts to crack — then we are likely to see growth across all sectors,” said Douglas Porter, senior economist at Nesbitt Burns Securities of Chicago.
“That is truly an encouraging result,” Porter said.
Norbert J. Ore, chairman of the institute’s manufacturing business survey committee, said the manufacturing sector had its best month since December 1983, when the manufacturing index registered at 69.9.
The new orders index also reached its highest level last month since December 1983, when it stood at 74.8.
“Based on this data, it appears that the recovery is gaining momentum,” Ore said.
The employment index registered at 51 in November, up from 47.7 in October and the first reading above 50 in 37 months.
Encouraged by the positive economic news, investors bid up shares in the stock market.
In late morning trading, the Dow Jones industrial average was up 87.25, or 0.9 percent, at 9,869.71, while the Nasdaq composite index rose 21.11, or 1.1 percent, to 1,981.37 and the Standard & Poor’s 500 index advanced 8.56, or 0.8 percent, at 1,066.76.
The new orders index rose to 73.7 in November from 64.3 the previous month, while the production index advanced to 68.3 in November from 62.6 in October.
The report said that 18 of 20 industries reported increased production in November, including photographic equipment, electronic components, transportation, chemicals and textiles.