Manufacturing Decline Slows in November
By Marjorie Olster
NEW YORK (Reuters) - Manufacturing activity declined for the 16th straight month in November but at a slower pace than in October in a sign the economy is recovering from the
Sept. 11 attacks, a National Association of Purchasing Management report showed on Monday.
NAPM said its Purchasing Managers Index rose to 44.5 from a 10-year low of 39.8 in October. That was better than market expectations of a 41.7 reading, but still below 50, which indicates the sector is contracting.
``The trend is definitely in the right direction, but it is too soon to claim an imminent recovery. Based on this report, the sector regained a significant portion of the output lost in October,'' said Norbert Ore, chair of the
NAPM Business Survey Committee.
Ore said the manufacturing sector could return to growth sometime during the April-June quarter of 2002.
Manufacturing activity has remained under 50 since August 2000. The manufacturing sector accounts for about a sixth of the U.S. economy.
A 10.5-point increase in the New Orders index, a barometer of future strength in manufacturing, was one of the sharpest
one-month rises in the history of the index, NAPM said. It jumped to 48.8 from 38.3 in October, fueling hopes for a recovery.The production index rose to 47.1 from 40.9, another indication of building strength. Meanwhile, the prices index fell to 31.6
from 32.5, making November the ninth consecutive month that manufacturers saw their input prices falling.
The PMI last rose in August, boosting hopes for a long-awaited recovery in manufacturing, one of the sectors hardest hit by the
slowdown that began last year. But the Sept. 11 attacks quashed those hopes and deepened the downturn.
The National Bureau of Economic Research, the nation's official arbiter of recession, said last week the United States was in a
recession that began in March 2001.
NAPM says a PMI above 42.7 over a period of time generally indicates an expansion of the overall economy. The November
PMI reading indicates the overall economy is growing while manufacturing continues to contract, Ore said.
``The overall picture is one of continued decline in manufacturing activity during the month of November,'' he said. ''The
manufacturing decline is now in its 16th month and even with this month's signs of encouragement, it takes time to build a
recovery across the sector.''
Gruß Dr. Broemme
