U.S. manufacturing
contracted in March for the first time in five months as orders
and production declined, an industry survey showed, suggesting the
economy stumbled at the end of the first quarter.
The Institute for Supply Management’s factory index last
month fell to 46.2, the lowest since November 2001, about the time
most economists say the economy started to emerge from recession.
In February, the index was 50.5. A reading less than 50 means
business is contracting.
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Factories are pulling back as consumer spending, which
accounts for more than two-thirds of the economy, stalled in the
months leading up to the Iraq war and confidence dropped to a nine-
year low. The index fell 9 points from January through March, the
biggest quarterly decrease since the first three months of 1984.
The decline “is worrying and raises significant questions
about the near-term strength of the economy,” said John Ryding,
chief economist at Bear Stearns & Co. in New York.
Bloomberg News
