Manufacturing Lowest In 28 Years
U.S. manufacturing fell sharply in December and reports from abroad showed the same for plants in Europe and Asia, as businesses cut production and slashed product orders in response to the global recession.
The Institute for Supply Management’s index of industrial production slipped by 3.8 percentage points in December compared with the month before, to the lowest level since 1980.
The private group’s survey of purchasing executives provides a rough guide to whether manufacturing companies are expanding output and receiving increased numbers of orders, or seeing their business decline. The index for December stood at 32.4, compared with 36.2 in November. An index above 50 indicates that manufacturing activity is expanding, while a reading below 50 indicates a decline.
It is the fifth consecutive month that the group’s measure of industrial production has stalled, a result consistent with declining consumer demand and economic weakness throughout the United States.
The decline was both deep and broad, the ISM reported: None of the industries covered in the survey reported an expansion in their business, and the drop registered not just in the institute’s index of production, but also in its measures of employment, prices and backlogged orders. The group’s index of new orders and prices showed them at their lowest levels since the late 1940s.