U.S. manufacturing activity fell for the fifth consecutive month in December, reaching its lowest level in almost a decade, a new report by the National Association of Purchasing Management (NAPM) showed today.
NAPM's closely watched index of manufacturing activity dipped to 43.7 last month from 47.7 in November. The latest reading was the lowest since April 1991 when the index was at 42.9. It was also well below the 47.0 forecast on average by economists.
The report showed a deepening of the downturn in the factory sector, which accounts for about a fifth of U.S. economic activity and jobs. Manufacturing has been hardest hit by a dramatic slowdown in growth in the second half of 2000.
But some analysts say this is a two-speed economy, with manufacturing in a contraction but the services sector, which accounts for 80% of the economy, still growing at a fairly healthy pace.
NAPM's new orders index, often used as an indicator of future activity, also fell sharply to 42.0 in December from 48.4 in November. Prices paid, an inflation gauge, rose to 61.0 from 56.6. New export orders remained below the key level of 50 for the third straight month, showing a decline in activity.
