Manufacturing Falls to 1982 Levels

Tempe, AZ, Nov. 3, 2008-- Manufacturing in the U.S. contracted in October at the fastest pace in 26 years as the credit crisis deepened and companies slashed orders.

The Institute for Supply Management's factory index dropped to 38.9, the lowest level since September 1982, from 43.5 the prior month. A reading of 50 is the dividing line between expansion and contraction.

The biggest housing recession in a generation has spilled over into the broader economy, undermining demand for factory goods and infecting credit markets. The drumbeat of dire news has focused voters' attention on the economy ahead of tomorrow's presidential election.

The ISM index was projected to drop to 41, according  economists' forecasts.

The purchasing managers' gauge of new orders for factories decreased to 32.2, the lowest level since 1980, from 38.8 the prior month. The production measure fell to 34.1 from 40.8.

The index of prices paid dropped to 37 from 53.5. Energy prices have plunged from their peaks in July, when a barrel of crude oil reached $147.

The employment index decreased to 34.6 from 41.8 in August. The economy has lost more than three-quarters of a million jobs so far this year.

Orders from overseas have weakened as economies abroad falter. ISM's export gauge dropped to 41, the lowest reading since records for this component began in 1988.