The overall economy failed to grow for the first time after 83 straight months, while the manufacturing sector was contracted for the third month in a row, the Institute for Supply Management reported yesterday.
According to the ISM’s monthly report on business, the purchasing managers index dipped to 38.9 in October from 43.5 in September.
Economists polled by Thomson Reuters predicted the index would slip to 41.5.
“The PMI indicates a significantly faster rate of decline in manufacturing when comparing October to September,” said Norbert J. Ore, chairman of the Institute of Supply Management’s manufacturing business survey committee. “It appears that manufacturing is experiencing significant demand destruction as a result of recent events, with members indicating challenges associated with the financial crisis, interruptions from the Gulf hurricane, and the lagging impact from higher oil prices. This is the lowest level for the PMI since September 1982 when it registered 38.8%. In this report, we see inflationary pressures dissolving as the prices index fell to 37%, the lowest since December 2001 when it registered 33.2%. Export orders also contracted for the first time following 70 months of growth.”
