The battered U.S. factory sector has stabilized, though it remains far from full health.
The Institute for Supply Management on Monday said its index of manufacturing activity fell to 50.8 in April from 51.8 in March. For a second straight month, however, the measure remained above 50, the threshold that divides expansion from contraction.
Before rebounding over the past few months, the factory sector was beset by low oil prices that squeezed the domestic energy sector while a strong dollar and weakness overseas depressed demand for U.S. exports.
Now, the clouds seem to be lifting. Oil prices have moved higher in recent months and the dollar has weakened against other major currencies as Federal Reserve policy makers signaled a willingness to move slowly on raising short-term interest rates, potentially offering some relief for American manufacturers.
“The worst is behind us,” said Bradley Holcomb, who oversees the ISM survey.
More sectors in April reported increased production and new orders compared with March, Mr. Holcomb said, offering “a broader base of growth across more industries.” The ISM’s export index rose to its highest level since November 2014.
Still, overall growth in both production and orders slowed in April, and the employment measure rose but remained in contractionary territory.
“It’s certainly nothing to write home about,” Mr. Holcomb said.