NEW YORK — Manufacturers, already hit by mounting job losses, saw business plummet to the lowest level in 26 years in October.
The Institute for Supply Management said Monday its manufacturing index fell to 38.9, the lowest reading since September 1982, when the country was near the end of a 16-month recession. Any reading below 50 signals contraction.
“Everything we can tell about the economy just got weaker,” said Stuart G. Hoffman, senior vice president and economist for the PNC Financial Services Group.
The manufacturing report confirmed the economy is falling deeper into recession, Hoffman said.
The manufacturing index had been hovering near what economists call “the boom- bust” line for most of the year until its sharp fall in September brought it to the lowest level since the aftermath of the terrorist attacks of Sept. 11, 2001.
October’s reading of 38.9 was sharply below the September figure of 43.5 and lower than economists’ expectations of 41.5, according to the consensus estimate of Wall Street economists surveyed by Thomson/IFR.
Manufacturers, already hurting from declines in construction and consumer spending, were further battered by the credit crisis and Gulf Coast hurricanes.
Martin Marietta Materials, which supplies granite, limestone, sand and gravel to builders, last week slashed its 2008 earnings guidance, saying it expects to earn between $4.25 and $4.65 a share, down from August guidance of $5 to $5.65 a share.
“Over the past 45 to 60 days, the lack of available business credit has stalled construction activity and further affected demand for our products,” the company said. “Construction projects underway have had credit effectively pulled, and new projects are subject to increasingly tighter lending standards.”
The overall unemployment rate was 6.1 percent in September for the second straight month, the highest it’s been in five years.
Monday’s figures were the latest in a string of grim economic indicators:
• The nation’s gross domestic product for the third quarter, released Thursday, showed the economy shrank at a 0.3 percent annual rate in the July-September quarter as consumer spending saw its greatest decline in 28 years.
• The Commerce Department’s report on construction spending Monday showed a 0.3 percent decline in September, the third drop in the past four months.
