Factory activity grew more rapidly in October

Manufacturing activity grew at a faster pace in October as production picked up but new orders slowed, raising concerns about future output.

An index of factory activity rose to 51.9 from 51.5 in September, the Institute for Supply Management said Tuesday. A reading above 50 means the sector is expanding while below 50 indicates contraction. Economists expected a smaller increase to 51.7.

For nearly two years, manufacturers have been grappling with an oil industry slump that has curtailed investments in steel pipes and other equipment. At the same time, a weak global economy and strong dollar have hurt U.S. exports.

But in recent months, manufacturers at least have stabilized. Rising oil prices have coaxed crude producers into reviving some shuttered wells, and the dollar generally has leveled off.

In October, an index of production increased to 54.6 from 52.8. And the employment index jumped to 52.9 from 49.7, the highest level in 16 months and a possible sign this week’s jobs report will show manufacturers ramped up hiring after cutting jobs for much of this year.

But a measure of orders – a good indicator of future output – fell to 52.1 from 55.1.

Of 18 sectors, 10 reported growth, including textiles, computer and electronics, paper and furniture. But several key areas contracted, including primary metals, fabricated metals, wood products, machinery and transportation equipment.