Tempe, AZ, Oct. 2—U.S. manufacturing activity contracted in September after seven straight months of growth, suggesting a nascent rebound has stalled, according to the Institute for Supply Management. Its index of business activity declined to 49.5 in September compared with 50.5 in August. Analysts had been expecting a reading of 51.0.
An index above 50 signifies growth in manufacturing, while a figure below that shows contraction.
“After a strong first quarter, the manufacturing sector has softened significantly,” said Norbert Ore, who oversees the monthly survey for the group. “Stagnant and sluggish are apt descriptions for manufacturing at this time.”
The last time the manufacturing index was below 50 was in January. Since June, manufacturing activity had been growing at a declining rate.
“It looks like the economy, at least on the manufacturing side, has flattened out in the last few months,” said Gary Thayer, chief economist at A.G. Edwards & Sons in St. Louis.
Still, much of the September data was mixed, making it difficult to spot trends, Ore said.
Purchasing and supply executives reported a wide range of concerns about the economy, including demand for products, the rising cost of energy and the impact of a possible war in Iraq, the institute said. Some saw evidence of a slow recovery.
