NAPM: Manufacturing Continues To Slow In September

Compiled ByTraci Purdum Although it is too early to determine the effects of the Sept. 11 terrorist attacks on U.S. manufacturing, the latest Manufacturing NAPM Report On Business shows a decline in manufacturing for the 14th consecutive month -- a trend that started in August 2000. The monthly report, issued by the National Assn. of Purchasing Management (NAPM), also shows the overall economy in September grew for the fourth consecutive month. NAPM's index of economic activity for September stood at 47%, indicating a slightly faster rate of decline than August's index of 47.9%. A reading in excess of 42.7%, over a period of time, generally indicates an expansion of the overall economy. NAPM's September production index was 51.3%, a slight decline from August's index of 52.2%. This is the second month the index has risen above 50% after eight months of decline. Of the 20 industries reporting, those registering growth in September were: leather; tobacco; petroleum; paper; food; glass, stone & aggregate; fabricated metals; miscellaneous; and chemicals. Also rising above the 50% mark for the second month in a row was the new orders index, which stood at 50.3% -- a decrease of 2.8 percentage points when compared with August's 53.1%. Nine industries reported higher rates of increase in new orders: leather; fabricated metals; petroleum; paper; food; miscellaneous; glass, stone & aggregate; printing & publishing; and rubber & plastic products. NAPM's manufacturing employment index fell below 50% in September for the 12th consecutive month. The index registered 41.2% in September compared with 40.8% in August, an increase of 0.4 percentage points. There were no reports of higher employment in any of the sectors during the month, the report states. The price index stood at 36.3% in September, marking the seventh consecutive month it has been below 50%. The index is 2.4 percentage points higher than August's 33.9%. In September, 6% of purchasing and supply executives reported paying higher prices and 30% reported paying lower prices, while 64% reported that prices were unchanged from the preceding month. The inventories index was at 38.9% indicating a slightly slower rate of inventory liquidation when compared with August's 37.7%. "The overall picture is one of continued decline in manufacturing activity during the month of September," says Norbert J. Ore, chair of the NAPM's Manufacturing Business Survey committee. "The manufacturing sector is in its 14th month of decline. A major sign of encouragement is that inventory liquidation appears to be slowing as manufacturers and their customers are bringing inventory levels under control."