U.S. November ISM Manufacturing Index Falls to 49.5 From 51.2
By Courtney Schlisserman
Dec. 1 (Bloomberg) -- Manufacturing in the U.S. contracted for the first time in more than three years, taking away a pillar of economic growth.
The Institute for Supply Management's factory index fell to 49.5, from 51.2 in October. A reading below 50 signals contraction.
Automakers are cutting production to clear away inventories of unsold vehicles, while the slump in homebuilding is hurting demand for construction products. Today's report adds to evidence that lower factory demand may be deepening the economic slowdown, after a report earlier this week showed orders for durable goods were at a six-year low in October.
``We have a housing sector that's in recession and we have a manufacturing sector that's teetering on the brink here and this is problematic,'' said Carl Riccadonna, an economist at Deutsche Bank Securities Inc. in New York, before the report.
Today's report contrasts with evidence of strength in European manufacturing. An index compiled by the Royal Bank of Scotland shows European manufacturing expanded for a 17th month during November. The index was at 56.6 in November after October's reading of 57. As with the U.S. index, a reading above 50 shows expansion.
The U.S. group's measure of prices paid for raw materials rose to 53.5, from 47 the month before. October's measure was the lowest since February 2002.
The prices paid measure was forecast to rise to 49.8, according to the median of economists' estimates in a Bloomberg News survey.
Economists surveyed by Bloomberg expected the total manufacturing index to rise to 51.5. Estimates ranged from 49.5 to 53.6.
To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net .
Last Updated: December 1, 2006 10:02 EST
By Courtney Schlisserman
Dec. 1 (Bloomberg) -- Manufacturing in the U.S. contracted for the first time in more than three years, taking away a pillar of economic growth.
The Institute for Supply Management's factory index fell to 49.5, from 51.2 in October. A reading below 50 signals contraction.
Automakers are cutting production to clear away inventories of unsold vehicles, while the slump in homebuilding is hurting demand for construction products. Today's report adds to evidence that lower factory demand may be deepening the economic slowdown, after a report earlier this week showed orders for durable goods were at a six-year low in October.
``We have a housing sector that's in recession and we have a manufacturing sector that's teetering on the brink here and this is problematic,'' said Carl Riccadonna, an economist at Deutsche Bank Securities Inc. in New York, before the report.
Today's report contrasts with evidence of strength in European manufacturing. An index compiled by the Royal Bank of Scotland shows European manufacturing expanded for a 17th month during November. The index was at 56.6 in November after October's reading of 57. As with the U.S. index, a reading above 50 shows expansion.
The U.S. group's measure of prices paid for raw materials rose to 53.5, from 47 the month before. October's measure was the lowest since February 2002.
The prices paid measure was forecast to rise to 49.8, according to the median of economists' estimates in a Bloomberg News survey.
Economists surveyed by Bloomberg expected the total manufacturing index to rise to 51.5. Estimates ranged from 49.5 to 53.6.
To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net .
Last Updated: December 1, 2006 10:02 EST
