ARLINGTON, Va. -- A sharp decline has gripped the manufacturing sector and will pose consistent challenges in the next three to six months, according to the Manufacturers Alliance/MAPI.
MAPI's December 2008 composite index dropped to 28 from 48 in September 2008. A reading at this level indicates that overall manufacturing activity is expected to contract over the next three to six months. The index is at its lowest level since the survey began in 1972.
The reading is the second straight quarterly reading below 50, the demarcation point between growth an contaction, and is well below the index of 64 a year ago.
"It seems as though manufacturing activity in most industries hit a wall following the credit crunch that erupted in mid-September," said Donald A. Norman, Ph.D., MAPI Economist and survey coordinator. "A second factor, and related to the credit crisis, is the rapid slowing of economic activity in countries that are major trading partners of the United States."
The export orders index fell to 25 percent in December from 76 percent in September, and the non-U.S. prospective shipments index dropped to 27 percent from 73 percent.
The annual orders index fell to 16 percent in December from 58 percent in September, and the U.S. prospective shipments index fell to 14 percent from 47 percent.
The quarterly orders index dropped to 15 percent from 44 percent, while the backlogs index reached an all-time low of 21 percent in December after reaching 49 percent in September.
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