WASHINGTON (AP) -- American factories grew in December at the fastest pace in more than two years as manufacturing continued to weather the pandemic better than the battered services sector.
The Institute for Supply Management reported Tuesday that its gauge of manufacturing activity rose to 60.7% last month, the highest reading since it stood at 60.8 in August 2018. The activity gauge was up 3.2 percentage points from a November level of 57.5.
Any reading above 50 indicates expansion in the manufacturing sector.
The U.S. economy collapsed from April through June but since that time manufacturing has posted solid gains while the services sector, which includes restaurants, bars and the travel industry, has been harder hit.
Timothy Fiore, chair of the ISM manufacturing committee, said that while manufacturing has recovered since spring, it continues to face virus-related headwinds such as factory shutdowns needed to sanitize facilities and difficulties in hiring new workers as the virus again surges in the U.S.
Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said that activity at U.S. factories in coming months would be exposed to "broadening containment measures that could disrupt and weigh on demand in the U.S. and abroad."
General Motors reported Tuesday that sales jumped 5% in the final quarter of 2020, its best fourth-quarter performance in retail sales since 2007, with deliveries up 12%. With spring included, however, retail deliveries for GM dropped 6% in 2020.
GM said its retail sales to individual buyers began to recover in May and reached pre-pandemic levels during the fourth quarter. But sales to fleet buyers are still down sharply, especially sales to rental car companies.
And flaring infections could hit auto manufacturers and other industrial companies hard again.