Decline in US factory output accelerates

过山车

http://www.ft.com/cms/s/0/1d0d1520-d938-11dd-ab5f-000077b07658.html

 

Decline in US factory output accelerates

By Krishna Guha in Washington, Michael Mackenzie in New,York and Chris Bryant in Berlin

Published: January 3 2009 02:00 | Last updated: January 3 2009 02:00

US manufacturing activity contracted at its sharpest pace for nearly 30 years in December, a closely watched survey suggested yesterday, underscoring the downward momentum in the economy at the turn of the year.

The Institute for Supply Managers survey index declined from 36.2 in November to 32.4, much worse than expected, while new orders and production measures hit their lowest level since the survey began in 1948. The release of the figures coincided with manufacturing data that highlighted the synchronised decline in economic activity globally.

JPMorgan's global purchasing managers index (PMI) yesterday showed manufacturing activity falling to its lowest level since the survey began 11 years ago.

A PMI survey compiled by broker CLSA showed China's manufacturing activity contracting for a fifth successive month, while the South Korean government said exports slid 17.4 per cent in December, after a revised fall of 19 per cent in November.

The revised version of a closely followed eurozone survey showed manufacturing activity hitting a new low of 33.9 in December - the lowest level since the PMI was created a decade ago.

John Ryding and Conrad DeQuadros, at RDQ Economics, said the surveys showed "the global nature of the economic contraction" and added that "the case for a massive global fiscal stimulus continues to grow". In the US, a part of the survey that deals with employment declined from 34.2 in November to 29.9 - its lowest level since November 1982 - raising the likelihood that job losses in December may have exceeded 500,000.

The prices paid index dropped from 25.5 to 18 - its lowest point since June 1949, according to JPMorgan. This was largely the result of plummeting energy and commodity prices.

US stocks reversed early losses, with the S&P 500 closing 3.16 per cent up in thin trading, having fallen 1 per cent. The Dow Jones Industrial Average ending 2.94 per cent higher, taking it above 9,000. In Europe, the FTSE Eurofirst 300 rose 2.6 per cent and in London the FTSE 100 closed 2.9 per cent higher. Many markets were closed in Asia but Hong Kong rose 4.6 per cent.

Additional reporting by Christian Oliver in Seoul