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Weak dollar helps exporters

American factories expanded for the third straight month in May, helped by a weaker dollar.Orders to US factories for long-lasting manufactured goods rose 3.4 per cent in April, the most since January. Most of the April strength came from the volatile commercial aircraft category.

The index was stuck below 50 from October through February as American factories struggled with economic weakness abroad and a strong dollar that made US products more expensive in foreign markets. The dollar has fallen against other major currencies since the end of January, giving factories some relief.

Manufacturing has stabilized. The weaker dollar this year has already made a material difference to exporters.

Manufacturers' new orders and production grew more slowly in May. Export orders and a measure of employment were unchanged. The index was pulled up by an increase in deliveries from suppliers. Overall, 12 of 18 manufacturing industries reported growth last month, led by wood products manufacturers and textile mills.

The US economy got off to a rough start this year, growing at a lackluster 0.8 per cent annual pace from January through March. Manufacturers' troubles weighed on growth. The growth rate is expected to rise to perhaps 2.5 per cent in the second quarter as a robust American job market gives consumers the incomes and confidence to spend more. Employers have added a healthy 2.7 million jobs over the past year.