Manufacturing activity declines for third consecutive month

November 3, 2008

Economic activity in the manufacturing sector failed to grow in October for the third consecutive month, and the overall economy concluded 83 consecutive months of growth, said U.S. supply executives in the latest Manufacturing ISM Report on Business®.

The report was issued Nov. 3 by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The PMI indicates a significantly faster rate of decline in manufacturing when comparing October to September. It appears that manufacturing is experiencing significant demand destruction as a result of recent events, with members indicating challenges associated with the financial crisis, interruptions from the Gulf hurricane, and the lagging impact from higher oil prices. This is the lowest level for the PMI since September 1982 when it registered 38.8 percent. In this report, we see inflationary pressures dissolving as the Prices Index fell to 37 percent, the lowest since December 2001 when it registered 33.2 percent. Export orders also contracted for the first time following 70 months of growth."

The two industries reporting growth in October are: Apparel, Leather & Allied Products; and Computer & Electronic Products. The industries reporting contraction in October are: Petroleum & Coal Products; Nonmetallic Mineral Products; Wood Products; Fabricated Metal Products; Furniture & Related Products; Textile Mills; Machinery; Plastics & Rubber Products; Primary Metals; Printing & Related Support Activities; Transportation Equipment; Miscellaneous Manufacturing; Electrical Equipment, Appliances, & Components; Paper Products; Food, Beverage & Tobacco Products; and Chemical Products.

The full report can be found here.