US manufacturing set to decline over next 6 months

16 October 2008 16:29  [Source: ICIS news]

WASHINGTON (ICIS news)--US manufacturing activity will decline over the next six months, the Manufacturers Alliance said on Thursday as it reported the lowest index of production expectation since 2001, following terrorist attacks in the US.

 

The alliance said its latest quarterly survey of senior financial officers in companies representing a broad range of manufacturing shows a reduction in the September composite index to 48 from the 50 measure reported in the previous survey in June.

 

“At this level, the index indicates that overall manufacturing activity is expected to contract over the next three to six months,” the alliance said.

 

The health of the broad US manufacturing sector is of concern to chemical makers because industrial production is a major downstream consumer of petrochemicals and derivative products.

 

The alliance’s composite manufacturing index is made up of 12 key industrial activity measures, such as inventories, order backlogs, capacity utilisation, prospective shipments and profit margins, among others.

 

“The composite index is at the lowest point since a reading of 40 in December 2001, just after the 9-11 attacks, and the first time it has been below 50 since that time,” the survey reported.

 

The index was at 65 as recently as September 2007.

 

“Events in the financial markets since mid-September will likely amplify the downturn in manufacturing activity in the US and abroad,” said Donald Norman, chief economist for the alliance.

 

“Manufacturers will face increasingly difficult challenges in the near term,” he added.

 

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By: Joe Kamalick
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