January 2nd, 2009
U.S. manufacturing contracted for the fifth straight month in December, the Institute for Supply Management said Friday, as no individual manufacturing industry reported growth in the month.
The overall ISM index fell to 32.4% in December, the weakest reading since 1980, according to the institute. It’s down from 36.2% in November.
Economists surveyed by MarketWatch were expecting the December ISM index to rise slightly from November’s reading, to 36.3%.
ISM readings above 50% indicate an expansion of the manufacturing economy, while readings below indicate a contraction. The recent low readings signal ongoing recessionary conditions, according to analysts.
“The decline covers the full breadth of manufacturing industries, as none of the industries in the sector report growth at this time,” said Norbert Ore, chair of the Institute for Supply Management.
The institute said that new orders now have contracted for 13 consecutive months, and are at the lowest level on record going back to January 1948.
Manufacturing payrolls also shrank as the employment index fell to 29.9% from November’s 34.2%.
On Tuesday, a separate report showed that business activity in the Chicago region remained weak in December. The Chicago purchasing managers index inched higher to 34.1% in December from 33.8% in November. Readings below 50% indicate overall business contraction.
See the full report here…
http://www.ism.ws/ISMReport/MfgROB.cfm
Source: Market Watch
January 2nd, 2009
The ailing U.S. steel industry is pressing President-elect Barack Obama for a public works plan that could be worth $1 trillion over two years to boost flagging demand for U.S.-made steel, the New York Times reported in Friday’s editions. Daniel DiMicco, chairman and chief executive of Nucor Corp, a giant steel maker, told the paper the industry was asking the incoming administration to “deal with the worst economic slowdown in our lifetime through a recovery program that has in every provision a ‘buy America’ clause.”
The industry supports building mass transit systems, bridges, electric power grids, schools, hospitals and water treatment plants — all of which would require large amounts of steel.
“We are sharing with the president-elect’s transition team our thoughts in terms of the industry’s policy priorities,” Nancy Gravatt, a spokeswoman for the American Iron and Steel Institute, was quoted as saying.
Obama, who is to be sworn in as president on January 20, has not revealed details of his soon-to-be-announced plan for spurring the weakest economy since the Great Depression more than 70 years ago. Aides have indicated most of the package will probably go into infrastructure spending rather than tax breaks.
“If the president-elect really follows through, he’ll fund a lot of mass transit projects,” said Wilbur Ross, a Wall Street dealmaker who put together a steel conglomerate known as Arcelor Mittal USA.
“All the big cities have these projects ready to go.”
Since September, U.S. steel output has plunged about 50 percent to its lowest point since the 1980s, largely because construction and auto production have fallen sharply.
The fall-off in production of appliances, machinery and other electrical equipment has also reduced steel orders, sending the price of a ton of steel down by half since late summer.
Industry executives are “adding their voices to pleas for a huge public investment program of up to $1 trillion over two years,” the Times reported.
Imports, which account for about 30 percent of all steel sales in the United States, are also hurting as customers disappear, the paper said.
(Reporting by Jim Wolf; editing by Todd Eastham)
Source: Reuters
