Jan. 15 (Bloomberg) -- U.S. industrial production may have climbed 0.5 percent in December, a fourth straight gain, as sales increases and lean inventories prompted companies to order more from factories, economists said ahead of a Federal Reserve report today. The Fed's gauge of work done at factories, mines and utilities rose 0.9 percent in November, the largest jump in four years. The December estimate is based on the median of 68 forecasts in a Bloomberg News survey. The Commerce Department today may report a 0.2 percent rise in November business inventories after a 0.4 percent increase the month before, according to the median estimate.
``Manufacturing is finally on its way back,'' said Tim Rogers, chief economist at Briefing.com, a Boston-based forecasting firm. Factory production accounts for 14 percent of the economy. ``You are seeing the business side starting to come through and invest, and I think you are going to see very strong growth in 2004 because of it.'' Industry and Fed surveys of manufacturing have found factory managers more confident that increases in demand will be sustained. A separate report today may show a strengthening in consumer confidence, further evidence demand will hold up. The University of Michigan's sentiment index may climb to 94 this month from 92.6 last, based on the median forecast. The proportion of industrial capacity in use may have risen to 76 percent last month from 75.7 percent in November, the Bloomberg survey found. The Fed is to issue its statistics at 9:15 a.m. in Washington. The Commerce Department is to report on inventories at 8:30 a.m. in Washington. The University of Michigan report is set for 9:50 a.m. Washington time.
Fed Surveys
The Institute for Supply Management's manufacturing index rose to the highest in 20 years last month as more managers reported orders improving than at any time since 1950, the Tempe, Arizona-based group said this month. As a result, more members boosted production than they had done since 1983, the survey showed. Regional Fed soundings reported yesterday showed more production increases this month. The central bank's measure of manufacturing in the Philadelphia region rose to the highest since 1993, and a similar gauge in New York state rose to the highest since its inception in July 2001.
`Roaring Back'
``One of the nice things about this last quarter is that after five or six quarters of relatively flat market in the U.S., the U.S. came roaring back,'' said Robert Swanson, chief executive of Linear Technology Corp., a Malpitas, California- based maker of semiconductors used in mobile phones and notebook computers, in a televised interview with Bloomberg News Wednesday. Linear said this week it posted its highest quarterly profit in more than two years in the period ended Dec. 28 after sales rose 28 percent. Factory production this year will increase 6.1 percent, the most since 1999, prompting manufacturers to hire after a three- year lull, according to a forecast from the National Association of Manufacturers released yesterday. The economy will probably expand 4.6 percent this year, the best performance since 1984, according to the median estimate of economists surveyed this month by Blue Chip Economic Indicators. The world's largest economy may have grown 3.1 percent in 2003, the survey showed. //www.bloomberg.com