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Purchasing index down
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January 4, 1999: 11:12 a.m. ET
Manufacturing sector contracts for seventh month in a row
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NEW YORK (CNNfn) - The nation's manufacturing sector contracted for the seventh consecutive month, the National Association of Purchasing Management reported Monday.
The NAPM's Purchasing Managers' Index, a broad barometer of overall activity, was slightly lower at 45.1 percent in December, versus 46.8 in November. Analysts had expected the index to reach 48 in December.
An index of 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.
Economic activity in the manufacturing sector continued to slow in December, even while the overall economy continued to grow, the report said.
Employment was down for the seventh straight month, the report said, while exports and imports failed to grow. Prices were down in December, continuing a trend that started in January.
The report also said that purchasers continued to express concerns about export markets, and they pointed to softness in the steel industry.
Of the 20 industries in the manufacturing sector, three reported improved business in December: food; printing and publishing; and miscellaneous -- mostly jewelry, toys, sporting goods and musical instruments.
"The manufacturing sector continued to contract in December," said Norbert J. Ore, chairman of NAPM's manufacturing business survey and director of corporate purchasing at Chesapeake Corp. "This is the seventh month of decline. Both production and the new orders declined, signaling that the manufacturing sector is obviously struggling."
NAPM's production index decreased 2.1 points from 48.6 percent in November to 46.5 percent in December. The new orders index rose 0.5 percent from 45.5 percent in November to 46 percent in December.
NAPM's backlog of orders index came in at 37 percent, indicating smaller backlogs when compared to 40.5 percent in November.
The price index continued to decline in December, but at a faster rate. The NAPM price index fell to 31.3 percent from 35 percent in November. The index shows lower prices paid by manufactures for the 12th straight month.
Imports of materials by manufacturers decreased in December at a slightly lower rate, as NAPM's import index was up 0.6 percent to 49.8 percent from 49.2 percent in November.
And the NAPM employment index contracted at a faster rate in December, as the index declined to 40.8 percent from 44.9 percent in November. This is the seventh consecutive month that the index declined.
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