Friday, January 2, 2009

Factories mired in worst slump in 28 years

NEW YORK (Reuters) – U.S. factory activity fell to a 28-year low in December as the deepening year-old recession hammered the manufacturing sector, producing a bleak outlook at the start of 2009.

The Institute for Supply Management said on Friday its index of national factory activity fell to 32.4 -- a figure indicating contraction and the lowest reading since 1980 -- from 36.2 in November. Its jobs gauge also hit the lowest level since 1982 and prices were the weakest since 1949.

The report on U.S. manufacturing echoed the dour tone set in factory surveys around the globe and indicated rough times ahead, with a gauge of new orders hitting its lowest level ever.

"Overall this is a very weak report, suggesting no sign of stabilization yet," said Ian Lyngen, interest rate strategist at RBS Greenwich Capital in Greenwich, Connecticut.

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