NEW YORK (CNNfn) - The nation's manufacturing sector contracted for a fifth consecutive month in October, as modest gains in production and imports failed to offset the sharp decline in new purchase orders, the National Association of Purchasing Management reported Monday.
The purchasing managers' index, a broad barometer of overall activity in the manufacturing industries, fell to 48.3 percent in October.
Economists had expected the index to stand at 49 for the month.
An index number above 50 generally indicates the economy is expanding, while anything below 50 points to contraction. The data are based on replies to survey questionnaires by purchasing executives in more than 350 industrial companies.
"The manufacturing sector continued to contract in October," said Norbert J. Ore, C.P.M., chairman of NAPM's manufacturing business survey committee and director of corporate purchasing at Chesapeake Corp. "This is the fifth month of decline following 22 consecutive months of growth. While production grew in October, the new orders index declined significantly and signals a continuing softness that could carry into the fourth quarter."
Of the 20 industries in the manufacturing sector, six reported improved business in October.
NAPM's production index fell 0.8 percentage point to 52.6 percent from 53.4 percent in September.
At the same time, the new orders index dropped 4.4 percentage points to 45.7 percent from 50.1 percent in September, the first monthly decline in the index in 30 months.
The backlog of orders index came in at 45.5 percent, indicating smaller backlogs when compared to September.
The prices index rose to 35.8 percent in October from 34.4 in September. And the inventories index rose to 49.8 percent in October versus 42.3 in September.
The imports index dropped to 51.2 in October from 53.1 the month before, while the export orders index fell to 42 from 45.8.
And the NAPM employment index declined to 45 percent from 45.5 in September.