September Fall for Production
Published: 01 October 2008
by Mike Buetow
TEMPE, AZ – The manufacturing sector in September dropped to its lowest level since October 2001 – the month following the terrorist attacks on New York City and Washington – the Institute for Supply Management reported today.
The segment of Computer and Electronic Products was among the six sectors showing growth, however. The overall economy grew for the 83d consecutive month.
The Manufacturing PMI was 43.5%, down 6.4 points from August and the lowest mark since October 2001's 40.8%. A reading above 50% indicates expansion in manufacturing. Over time, a PMI over 41.1% indicates an expansion of the overall economy. The PMI for September annualized corresponds to a 0.8% increase in real GDP.
ISM spokesman Norbert J. Ore said, "The PMI indicates a significantly faster rate of decline in manufacturing during September, marking a departure from the 2008 trend toward negligible growth or contraction each month. This month's report is showing prices rising at a much slower rate, as the Prices Index fell to the lowest level in 21 months. Export orders continued to increase, but at a slower rate than in August."
The New Orders index was 38.8%, down 9.5 points sequentially. A reading above 51.6%, over time, is generally consistent with a rise in the Census Bureau's manufacturing orders figures.
