Manufacturing suffers worst falloff since ’01
The Chicago Tribune reports that a key measure of nationwide manufacturing activity plunged in September, falling to its lowest reading since the recession-racked month of October 2001, as producers responded to weakening consumer demand by slashing output. For the last several months, the Institute for Supply Management’s monthly manufacturing index has been bumping right around 50, the level separating expansion from contraction. The consensus from economists was that the measure would dip fractionally in September, to 49.5 from August’s 49.9 reading. Instead the index took its biggest fall in more than 24 years, dropping to 43.5 on major production cuts, softening orders and falling industry employment levels.
The manufacturers group doesn’t expect any recovery in manufacturing activity until mid-2009. A number of observers suggested that September’s nose dive overstated the decline in the economically crucial sector. Several producers in the Gulf of Mexico area suspended operations because of hurricanes last month, and about 27,000 unionized machinists launched an ongoing strike at Boeing Co., freezing the aircraft maker’s production of commercial jets.