Manufacturing activity declines

The Institute for Supply Managment's (ISM) index of manufacturing activity compiled from a survey of purchasing managers fell to 48.3 in February from 50.7 in January. Economists had predicted a reading of 48.

A reading above 50 indicates growth in the sector. A reading below 50 represents a decline. The latest index is the weakest since April 2003. It also is the seventh of the past eight months in which the index has declined from the previous month.

Surveyed managers said production, new orders, and inventories were relatively stable last month. The index showed seasonally-adjusted production fell 4.5 percent in the month, but still is just barely registering growth. New orders continue to decline, and inventories contracted faster than the previous month, according to the index.

Although fewer managers said they expect employment to be lower in February, only 10 percent said they expected employment to be higher in the month.

Commenting on the report, Wachovia economist Adam York said the report should translate into a reading of about 2.3 percent growth in gross domestic product when compared to similar historical numbers.