WASHINGTON — Manufacturing in the United States expanded in December at a pace that shows the industry is stabilizing after reaching a three-year low a month earlier.
The Institute for Supply Management’s manufacturing index climbed to 50.7 last month from November’s 49.5, which was the weakest since July 2009, the Tempe, Ariz.-based group’s report showed Wednesday. Fifty is the dividing line between expansion and contraction. The median forecast of economists surveyed by Bloomberg called for a rise to 50.5.
Sustained growth in the U.S., in part due to a housing rebound, and steadying overseas markets are helping underpin factory orders and keeping manufacturing from faltering.
While lawmakers moved to extend tax cuts for about 99 percent of households, corporate confidence in the expansion will take time to build as Congress prepares to debate spending cuts and the debt ceiling.
“We finished the year on an uptick, but there isn’t a firm rebirth of confidence on the part of businesses," said Tim Quinlan, an economist at Wells Fargo Securities in Charlotte, N.C., who projected 51 for the December factory index. “We could face a little bit of a bumpy period before turning to slow growth in manufacturing."
The median forecast was based on projections from 71 economists in the Bloomberg survey. Estimates ranged from 48 to 52. For all of last year, the factory gauge averaged 51.7, down from 55.2 in 2011 and 57.3 in 2010.