May 2, 11:14 AM EDT

A private survey says U.S. manufacturers expanded in April for the second straight month, suggesting that factories are adapting to a strong dollar and economic weakness overseas


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A private survey says U.S. manufacturers expanded in April for the second straight month, suggesting that factories are adapting to a strong dollar and economic weakness overseas

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WASHINGTON (AP) -- U.S. manufacturing expanded in April for the second straight month, suggesting that factories are adapting to a strong dollar and economic weakness overseas, according to a private survey.

The Institute for Supply Management said Monday that its manufacturing index came in at 50.8 last month, down from March's 51.8 reading but above the 50 threshold that signals growth. The March number had snapped a five-month losing streak for manufacturers.

Export orders grew faster in April. Still, the index came in below economists' expectations, and new orders and production grew more slowly last month than they did in March. A measure of employment fell, suggesting that factories are cutting workers.

Eleven of 18 manufacturing industries reported growth last month, and 15 reported increases in new orders and production. "This morning's report brings another welcome sign of stabilization for the US manufacturing sector," Barclays economist Rob Martin wrote in a research report.

The dollar surged last year, but has fallen since January, giving American factories some relief. A strong dollar makes U.S. goods more expensive in foreign markets. Bradley Holcomb, chair of ISM's manufacturing survey committee, expects manufacturing to show resiliency "if the dollar continues to behave itself."

The ISM, a trade group of purchasing managers, surveys about 200 U.S. companies each month.

Last week, the Commerce Department reported that orders to U.S. factories for long-lasting goods rose in March, rebounding from a drop in February. But the gain was generated by rising demand for military equipment, a volatile category. Excluding defense, durable goods orders dropped 1 percent in March.

The American economy has drawn more strength from services than manufacturing. The ISM's services index has come in above 50 every month since January 2010.

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