U.S. Manufacturing Index Shows Contraction in March
Apr 2, 2009
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The Institute for Supply Management said that its manufacturing index rose to 36.3 last month from 35.8 in February. The index hit a 28-year low of 32.9 in December. The report covers indicators including new orders, production, employment, inventories, prices, and export and import orders. The report said declines in new orders and employment persisted, but slowed a bit. Still, none of the 18 manufacturing industries grew in March.
"Momentum in manufacturing is still very much downward, but the rate of decline is slowing," said Norbert Ore, chair of the ISM manufacturing survey committee.
New orders rose to 41.2 — the first reading above 40 in seven months. Six industries, including computer and electronic products, said orders grew.
Manufacturers still think their customers' inventories are too high. That index rose for the eighth straight month to 54 in March from 51 in February.
The winding-down of inventories to healthy level is at least three months away, Ore said. "At that point, I would expect to see new orders possibly start to show some strength, and then it's a number of months before you see any improvement in employment," he said. "It's going to be long and it's going to be slow."
The employment index inched off its record low of 26.1 in February to 28.1 percent in March, but none of the 18 industry sectors said their labor forces grew last month.
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