Looks like Tough Times ahead for Manufacturing

January 2nd, 2009 at 09:52am Bob Trojan

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

Entry Filed under: Productivity, Economy