http://www.boston.com/dailynews/152/nation/Manufacturing_activity_falls_f:.shtml

Manufacturing activity falls for 10th month in row

By Lisi De Bourbon, Associated Press, 6/1/2001 16:35

NEW YORK (AP) Manufacturing skidded for a 10th straight month in May, suggesting it is still the weakest part of the economy, an industry report showed Friday.

The National Association of Purchasing Management said its purchasing index fell last month to 42.1 from 43.2 in April. An index above 50 signifies growth in manufacturing, while a figure below 50 shows contraction. Analysts had been expecting 43.5 for May.

''Manufacturing is in a full-blown, outright, unmitigated recession,'' said Mark Zandi, chief economist at Economy.com. ''It's an open wound that hasn't been bandaged yet and threatens to infect the rest of the economic body.''

The report is closely watched because it is one of the first indications of how the manufacturing sector performed. The figures are based on a survey of purchasing executives who buy the raw materials for manufacturing at more than 350 industrial companies.

''May appears to be a continuation of the soft start for the second quarter we saw in April,'' said Norbert Ore, who oversees the monthly report.

The report reflected purchasing managers' concerns about the economy, the impact of soaring energy prices and a lackluster quarter in the automobile sector, he said.

Despite the decline in production, employment and orders in the manufacturing industry, Ore said he was he was encouraged that report showed a drop in prices and inventories.

But the report provided ''no evidence of recovery,'' since manufacturing slowed at a faster pace in May than in recent months, Ore said.

-- Anonymous, June 02, 2001