Survey Reflects Rebound By Manufacturing Sector

American manufacturing resurged in July after two months of decline and raised the outlook for a rebound in the second half of the year, a survey of industrial firms said Tuesday.

Though the National Association of Purchasing Management index showed marginal growth, the results were stronger than expected and were tied mainly to a dramatic rise in new orders to the nation’s factories.

The purchasing managers group said its index of manufacturing growth rose to 50.5 percent from 45.7 percent in June.

An index reading above 50 percent indicates an expansion of activity at the nation’s factories, while a reading below 50 percent indicates a decline.

The survey showed that declines in inventories eased in July, signaling that businesses are not draining inventory in anticipation of slow sales.

The figures further underscored doubts that the Federal Reserve will cut interest rates again to give the economy a boost. But economists said the purchasing managers data doesn’t necessarily portend the end of Federal Reserve rate cuts.