TEMPE, AZ -- Manufacturing economic activity expanded in August for the first time in 19 months and the overall economy grew for the fourth consecutive month, according to the latest survey of US supply executives.

“The year-and-a-half decline in manufacturing output has come to an end, as 11 of 18 manufacturing industries are reporting growth when comparing August to July," said Norbert Ore, a spokesman for the Institute for Supply Management, which tracks the data.

The August PMI index of 52.9% is the highest since June 2007, and up four points from July, boosted by a significant recovery in New Orders. The latter index was up 9.6 points to 64.9%, its highest mark since December 2004.

A reading above 50% indicates that the manufacturing economy is generally expanding. A PMI in excess of 41.2%, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the fourth consecutive month in the overall economy, as well as expansion in the manufacturing sector for the first time since January 2008.

Based on historical correlations, the August PMI corresponds to a 3.7% increase in annualized real GDP.

The New Orders index was up for the second consecutive month. A reading above 48.8%, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).

"The growth appears sustainable in the short term, as inventories have been reduced for 40 consecutive months and supply chains will have to re-stock to meet this new demand,” said Ore. "This is certainly a positive occurrence," he said, "[but] keep in mind that it is the beginning of a new cycle and that all industries are not yet participating in the growth."

The Computer & Electronic Products segment was among the 11 manufacturing industries reporting growth in August.

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