Fast Factory Growth Spurs Job Creation In Midwest Region; Q4 GDP Revised Up To 4.1%; Capital investment gains are fueling manufacturing; outlook strong for sector.(A)

Byline: JED GRAHAM

Chicago-area factories continued to ramp up strongly in February, leading more firms to add jobs than cut them. Meanwhile, the government said the economy grew slightly faster in the fourth quarter than first estimated.

The National Association of Purchasing Management-Chicago said its manufacturing activity index, based on a survey of regional purchasing managers, registered 63.6, a bit lower than January's 65.9, which was the fastest in nine years. February's reading was the 10th straight month over the neutral 50 level and the fourth straight above a very strong 60, a streak not seen since 1994-95.

A gauge of employment jumped to 54.8 from 48.3 the prior month, reaching its highest level since April 1998, as 17% of firms added workers while just 11% cut staff. That was a big turnaround from January, when 23% pared their work force and 19% added jobs.

The NAPM-Chicago production gauge remained elevated at 73, slipping from January's 20-year high of 76.5, while the new orders index eased to a still-robust 67.5 from 69.7.

Following strong regional factory reports from Philadelphia and New York, the Chicago report cemented expectations for a strong reading on national factory activity. The Institute for Supply Management's manufacturing index, due out Monday, is expected to dip from a 20-year high of 63.6 in January but remain above 60 for a fourth straight month.

Among Midwest producers, truck maker Navistar International and Deere & Co., the world's largest farm equipment maker, reported solid increases in revenues for the quarter ending Jan. 31 in recent days.