As Hurricane Rebuilding Slows, So Does Factory Growth

December saw a downturn in manufacturing activity as rebuilding from Gulf Coast hurricanes waned. The Institute for Supply Management said yesterday that its factory index fell to 54.2 last month, from 58.1 in November, the biggest decline since July 2002. A reading greater than 50 indicates expansion. The group noted that manufacturing leveled off after inventory restocking and reconstruction from Hurricanes Katrina, Rita and Wilma had spurred factory production in the previous two months. Strong activity in September and October had boosted prospects for the economy as home construction and the real estate market cooled. Economists told Bloomberg News, however, that a pickup in consumer spending and investment by businesses in new equipment would help energize manufacturing growth this year.