As new orders and production growth cycles stretching back 42 months came to an end, the manufacturing sector of the U.S. economy contracted in November for the first time since April 2003, according to data released Dec. 1 by the Institute for Supply Management (ISM).
Its manufacturing business activity index fell to 49.5% last month from 51.2% in October, a decline of 1.7 percentage points. An index figure above 50% indicates that the manufacturing sector generally is expanding; a figure below 50% signals that it is contracting.
The new orders component of the overall index fell to 48.7% in November from 52.1% in October, a decrease of 3.4 percentage points. Production also posted a 3.4-percentage point decline, falling to 48.5% in November from 51.9% in October.
Manufacturing employment contracted, falling to 49.2% last month from 50.8% in October, a 1.6 percentage point decline.
New export orders continued to grow in November, in response to a weaker U.S. dollar, but their rate of growth slowed by just under a percentage point.