US manufacturing takes a dive

08-11-2011

The US manufacturing industry slumped in October, largely as a result of cooling global demand.

The Institute for Supply Management's factory index dropped to 50.8 last month from 51.6 in September, according to the group's latest data.

Fifty is the dividing line between growth and contraction.

Manufacturing also weakened in China and the UK during October – partly a reflection of Beijing's efforts to cool its economy and Europe's debt crisis.

A Chinese factory index dropped to the lowest level since February 2009, while a UK manufacturing gauge declined to a 28-month low.

Meanwhile, Federal Reserve policy makers are expected to meet soon to determine if more monetary easing is needed to spur manufacturing demand.

Senior US economists are concerned that manufacturing in Europe and China are showing signs of softening, which could potentially impact on the US.

The economists warn that the US will now likely struggle to surpass third-quarter GDP growth.

Estimates for the manufacturing index from 85 economists ranged from 50.5 to 55. A reading above 42.5 generally indicates an expansion in the overall economy.

RELATED NEWS

  1. Made a program change you wish you hadn't? Lose the only copy of the device program? Not sure if the program running is the right one?
    Control Logic’s ‘Vault’, powered by MDT AutoSave Change Management software, is a plug-and-play system to help reduce errors and downtime, increase productivity,...
  2. tank
    A collaborative partnership between Lockheed Martin, Australian manufacturer Omni Tanker and the University of New South Wales (UNSW) will look to develop and commercialise world-first composite tank technologies, thanks to a grant from the Federal Government’s Advanced Manufacturing Growth Centre...
  3. 3D printer
    Obsolescence is an unavoidable part of any manufacturing environment. However, it’s concerning that nearly 70% of companies admit they do not know when vital equipment requires replacing, or when they do, they scramble to find replacements. Here, Claudia Jarrett, country manager at automation parts...