Factories Operate Near 20-Year High

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http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=749&e=1&u=/nm/20040301/bs_nm/economy_manufacturing_dc

U.S. factories boomed at close to a 20-year high in February, according to a survey released on Monday that also suggested a turnaround in hiring may be on the horizon after a three-year struggle.

The Institute for Supply Management said its monthly manufacturing index fell to 61.4 in February from January's two-decade high of 63.6, showing the ninth straight month of expansion in the sector that makes up less than a fifth of the U.S. economy.

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The employment index jumped to 56.3 in February -- the highest since December 1987 -- from January's 52.9. ISM's Ore said more and more factories were reporting hiring though it has yet to show up in government employment statistics.

Even as the ISM report and other regional surveys have shown a pick-up in jobs during the past two months, the government's payrolls survey showed a 38,000 decline in manufacturing jobs nationwide.

Ore said there are "a lot of comments about people doing some hiring." The February U.S. payrolls report will be released Friday and economists forecast a 125,000 rise.

Two things are worrying manufacturers, ISM said -- the rapid rise in energy prices and a growing shortage of steel.