Three-Year Low, Again
A slowdown in business spending at home and abroad has slowed the manufacturing sector's output, as a market index has showed contraction in the industry for three straight months with their August report.
Manufacturing contracted for the third straight month in August, according to a leading index, marking the longest slide since 2009.
The Institute for Supply Management (ISM), which surveys more than 300 manufacturing companies on a variety of categories to generate its monthly index, reported a decline to 49.6 in August. This follows a reading of 49.8 in July and 49.7 in June; a reading below 50 indicates industry contraction.
The last time ISM reported three straight sub-50 readings was May through July in 2009. The index averaged 55.2 in 2011, and 53.6 in the first five months of 2012.
The new orders measure, an indicator of future demand, fell to 47.1, the lowest since April 2009, from a reading of 48 the prior month as a result of the slowdown in China.
Manufacturing accounts for about 12 percent of U.S. gross domestic product. A recent slate of slowing economic figures indicates that private businesses are holding back on new investments due to domestic and international market uncertainty.