WASHINGTON (Oct. 2, 8 a.m. ET) — US manufacturing output grew last month, prompting some observers to suggest the country’s economy was stabilizing after three months of contraction.

An index compiled by the Arizona-based Institute of Supply Management (IMS) rose to 51.5 last month, from 49.6 in August — the dividing line between expansion and contraction is 50.

News agency Bloomberg reported that figures showed US factories were holding up in the face of a global economic slowdown that has weakened manufacturing from Asia to Europe.

“Mostly resilient” automotive sales could be allowing production to keep “holding the water line,” Sean Incremona, senior economist at 4Cast Inc. in New York, said.

However, “there’s really too much policy uncertainty to make manufacturing considerably stronger”, he told Bloomberg.

Estimates for the index from the 76 economists surveyed by the IMS ranged from 48 to 51.2.

Earlier this week the latest Markit/CIPS Purchasing Manager’s Index found that United Kingdom manufacturing output had dipped in September.