Manufacturing Loses Steam; First Drop In 7 Months

October 1, 2002

NEW YORK (AP) — Manufacturing activity contracted in September after seven straight months of growth, an industry group reported Tuesday.

The Tempe, Ariz.-based Institute for Supply Management said its index of business activity declined to 49.5% in September compared with August. Analysts had been expecting a reading of 51.0%.

An index above 50% signifies growth in manufacturing, while a figure below that shows contraction.

"After a strong first quarter, the manufacturing sector has softened significantly," said Norbert Ore, chairman of the institute. "Stagnant and sluggish are apt descriptions for manufacturing at this time."

Ore also said much of the September data was mixed, making it difficult to spot trends.

The ISM measure is tracked by economists because it offers an early reading on the health of the manufacturing sector. Its index is based on a survey of purchasing executives who buy the raw materials for manufacturing at more than 350 companies.

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