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U.S. manufacturing index shrinks to 3-year low; region sees similar drop

December 4, 2012

U.S. manufacturing shrank in November to its weakest level since July 2009, one month after the Great Recession ended. Concerns about automatic tax increases in the new year cut demand for factory orders and manufacturing jobs. The Institute for Supply Management said Monday that its index of manufacturing conditions fell to a reading of 49.5. That's down from 51.7 in October. Readings above 50 signal growth, while readings below indicate contraction. Similarly, an index released last week by Wayne State University showed signs of a weakening but still growing economy. The Southeast Michigan Purchasing Managers Index for November is at 51.9, dropping seven points from the October score of 58.9 and indicating slowing growth in the region's economy. Declines in production activity, new orders and hiring were the factors contributing to this month's decrease.