Manufacturing Slips in First Drop Since ’82

The U.S. manufacturing economy contracted in October, the first decline since December, 1982, the National Assn. of Purchasing Management reported today.

The association’s index slipped to 43.4%, its fourth consecutive monthly decline.

A reading below 50 generally indicates the manufacturing segment of the economy is experiencing a decline in growth.

Robert Bretz, the chairman of the association’s business survey committee, said: “The fourth quarter began like the third quarter ended, with a decline in the manufacturing economy. Virtually all indicators confirmed the growing weakness in manufacturing, which was enough to pull the overall economy into slightly negative growth.”

Betz, who is the director of materials management for Pitney Bowes Inc. of Stamford, Conn., added: “With new orders the weakest in eight years, immediate relief does not seem likely. If the (index) remains unchanged at the October level for the remainder of the year, past experience indicates this would be consistent with real GNP growth of about 1% for all of 1990.”

Employment fell for the 20th consecutive month, and is at the highest rate since May, 1985. The rate of 40.7%, down from September’s 41.5%, indicates that manufacturers are continuing to adjust employment levels to reflect the declining economy.