US Manufacturing Activity Falls To Lowest Level In 26 Years.
The AP (12/2, Rugaber) reports, "A gauge of US manufacturing activity that fell to a 26-year low Monday followed similarly weak readings in Europe and China, fueling fears of a deepening global downturn. The Institute for Supply Management's (ISM) index of manufacturing activity for November fell to 36.2 from October's 38.9." Economists said that "the manufacturing survey showed that the US economy is in a steep recession and that tough times will continue for manufacturers. ... Exports, a key source of strength for manufacturers over the past couple of years, are no longer a bright spot as major economies in Europe and Asia also slow." Economists also said that "separate manufacturing surveys on Monday from the United Kingdom, the European Union, China and other countries were weak." In addition, "Other figures from the manufacturing survey signaled trouble ahead: The ISM's new-orders index fell to 27.9 from 32.2, its lowest level since June 1980."
The Wall Street Journal (12/2, Bater) quotes Cliff Waldman, an economist for the Manufacturers Alliance/MAPI trade group, as saying that "the sharp drop 'indicates that the rapidly declining US and global economies have created a deep and worrisome slump in the US manufacturing sector.'" The ISM report also "showed payrolls shrank, with the employment index at 34.2 from 34.6."
The Financial Times (12/2, Giles) notes that in China, "the purchasing managers index compiled by the government-linked China Federation of Logistics and Purchasing fell from 44.6 in October to 38.8 last month, the lowest since the series started in 2005." In addition, "the eurozone manufacturing PMI figures hit a series low."
The New York Times /AP (12/2, B3) adds that economists said that "they believe the construction industry will be facing severe troubles until an economic recovery is firmly under way, probably not until the second half of 2009." A Commerce Department report "showed that nonresidential construction dropped 0.7 percent in October, the third decline in four months, leaving activity at a seasonally adjusted annual rate of $417.7 billion. Nonresidential activity had been an island of strength in the midst of the steep downturn in housing, but that area has begun to weaken because of the severe credit squeeze, which is making it harder for developers to get financing."
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