Manufacturing declines at slower rate in April

The decline in orders and production at the nation’s factories has slowed in recent weeks, but manufacturers are still struggling to survive a deep and stubborn recession, data released Friday showed.

Manufacturing contracted less than expected in April, according to a closely watched index of manufacturing activity compiled by the Institute for Supply Management. Businesses cleared shelves and warehouses at a record pace last month, easing the need for further production and job cuts.

The most encouraging part of the ISM report were new orders, which rose to their highest levels in eight months, to 47.2 from 41.2 in March. Demand for U.S. exports also improved, despite the global recession. The ISM measure of export orders rose to 44 from 39.

Even as manufacturing showed signs of getting back on its feet, however, other data underscored how weak the economy remains.

Factory orders, which offer a glimpse of manufacturing activity in the coming months, fell in March by 0.9% after posting a 0.7% gain in February, the Commerce Department reported. Orders for durable goods such as washing machines, autos and other products designed to last three years or more were also down in March, for the seventh time in the last eight months. Orders for chemicals, paper, textiles and other nondurable goods fell sharply compared with February.

“The manufacturing recession continues,” Wachovia economist John Silvia wrote in a note to clients. “Manufacturers will continue to cut jobs as a reflection of the current recession and lower growth expectations for future consumer demand.”

Consumer products maker Newell Rubbermaid Inc. exemplified the experience of many manufacturers. The Atlanta company’s first-quarter profit fell 41% compared with the same period last year, which was better than analysts had expected.

On an analyst call Friday morning, Chief Executive Mark Ketchum cited lower inventory levels as one reason. He added, though, that “while there has been some anecdotal evidence to suggest the economy may be starting to bottom out, we believe it is too soon to come to this conclusion.”