US manufacturing at 20-year high

A gauge of US manufacturing held close to a 20-year high in June. Construction spending also increased for a fourth straight month, supporting the Federal Reserve’s view that the US economy is growing “at a solid pace”.

The Institute for Supply Management’s factory index was 61.1 last month, after 62.8 in May. The index, in which readings above 50 signal expansion, reached 63.6 in January. That figure is the highest since December 1983. Construction spending rose 0.3% in May, the Commerce Department said.

“The manufacturing sector remains quite strong, even if the rate of growth is cooling a bit,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

Manufacturing accounts for about one-seventh of the US economy.