updated 2/1/2010 11:12:17 AM ET 2010-02-01T16:12:17

The U.S. manufacturing sector grew for a sixth straight month in January, to its strongest point since August 2004. The report bolstered hopes that America's factories will help drive the economic recovery.

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The Institute for Supply Management said its manufacturing index read 58.4 in January, compared with 54.9 in December. Analysts polled by Thomson Reuters had expected a level of 55.5. A reading above 50 indicates growth.

New orders, a sign of future growth, jumped to 65.9 in January, the highest level since 2004, from 64.8 in December. Current production surged to 66.2 from 59.7, also to its peak since 2004. Order backlogs grew.

Thirteen of 18 industries said they were expanding, led by the apparel, textile mills and machinery sectors.

Manufacturers have been pumping up production to feed their customers' depleted stockpiles. The ISM said manufacturers' inventories contracted at a slower rate in January, but their customers' stockpiles fell to an all-time low.

As their customers try to restock their shelves, manufacturers will need to ramp up production to match their demands. That will likely mean hiring more workers, which would help invigorate the economic rebound. ISM's employment measure grew last month.

Meanwhile, a weak dollar is boosting exports to fast-growing countries in Asia and Latin America. Monday's report said exports grew more quickly in January, to 58.5 from 54.5 in December.

A resurgence in worldwide trade is helping sales for American companies. In the fourth quarter, U.S. exports rose 18.1 percent, the government said last week. Shipments of goods alone soared 28.1 percent.

Reports from around the globe — India, China, South Korea and the eurozone — showed rising strength in manufacturing and exports.

Economists warn, though, that high unemployment and tight credit for small businesses could make the inventory bounce short-lived.

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