Manufacturing Index Drops To 28-Year Low

The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index fell to 32.4 in
December, a greater-than-expected decline from November’s reading of 36.2, the
Associated Press reports.

Components of the index hit historic lows. New orders fell to their lowest level on records going back to 1948. Prices fell as the number of respondents saying they had paid more in December than in November sank to its lowest monthly reading since 1949. A reading below 50 for the overall index indicates contraction. The U.S. weakness is part of a worldwide slowdown. China’s manufacturing sector, which accounts for 43% of the economy, contracted for a fifth straight month in December. Singapore said its economy shrank in the fourth quarter, and South Korea said its exports fell 17.4% in December.

As the economy sputters through a recession that began in December 2007, no industry is proving resistant. No sector reported overall growth in December. Also, none reported growth in new orders, production, employment or prices, as businesses from tobacco to coal products to food makers saw declines. Declining prices, coming after the summer’s soaring market for commodities, have sent manufacturers, especially in chemicals and metals, reeling.