Slower but solid growth in March

The national and regional manufacturing sectors on Monday reported slowing, but solid, growth for March, perhaps signaling a return to a more normal pace of economic expansion.

Utah's business conditions index declined to 64.2 from February's 65.6, according to a report from Creighton University in Omaha, Neb. The Creighton study is based on a monthly survey of local supply managers and business leaders.

The index ranges from zero to 100, with a figure over 50 indicating an expansionary economy over the next three to six months. It uses the same methodology as a national survey conducted by the Institute for Supply Management, a private research group that surveys purchasing and supply executives in approximately 400 industrial companies nationwide.

In a separate report released Monday, the ISM said its manufacturing index was 55.2 last month compared with 56.7 in February.

Also Monday, the government reported that construction spending rose to a record level in February as home building hit an all-time high. The 0.8 percent increase to a seasonally adjusted annual rate of $1.185 trillion came despite a weakening in home sales.

That topped the 0.5 percent increase expected by Wall Street and demonstrated that construction should remain a source of strength for the economy in 2006 as private building of offices, factories and other projects takes up the slack from a cooling housing market.

"Today's report on construction spending shows the industry is hitting on all cylinders with strong, balanced growth," said Ken Simonson, chief economist for the Associated General Contractors of America, an industry trade association.

On Wall Street, the Dow Jones industrial average rose as much as 138 points early Monday before falling back in the afternoon. At the close of trading, the Dow gained 35.62, or 0.32 percent, to 11,144.94. The S&P 500 rose 2.98, or 0.23 percent, to 1,297.81, while the Nasdaq dropped 3.05, or 0.13 percent, to 2,336.74.

Regarding the national manufacturing report, of the 20 sectors tracked by the ISM, 15 reported growth. New orders to manufacturers registered 58.4, down from 61.9 in February, according to the ISM report. Production was virtually unchanged, with a reading of 57.5 compared with 57.4 the previous month. ISM's measure of employment in the sector declined to 52.5 from 55.0, also a sign of continued, but slower, growth.

"Manufacturing is in good shape. It's moving forward," said Joel Naroff of Naroff Economic Advisors in Holland, Pa. "We're getting demand from the rest of the world. Backlogs are building strongly. All of those things really indicate that the manufacturing sector has yet to skip a beat."