Manufacturing Sector Sluggish In September

The Institute for Supply Management released a September reading of U.S. manufacturing activity at 43.5, the lowest level since October 2001. The reading dropped from 49.9 in August, the largest one-month decline since January 1984, when it fell to 60.5 from 69.9. (A reading above 50 signals growth.)

Economists had predicted a much stronger reading of 49.5, according to the consensus estimate of those surveyed by Thomson/ IFR. The index has been hovering on what economists call “the boom-bust” line for most of the year.

The survey of purchasing managers found new orders fell to 38.8 in September from a reading of 48.3 in August. Employment, deliveries, inventories and manufacturers’ order backlogs also fell. Industries reporting contraction included apparel, furniture, machinery, transportation equipment and electrical appliances. High prices for commodities, along with tight credit conditions, have begun to squeeze companies. ❖