U.S. manufacturing slumps on all fronts

The manufacturing industry slumped for the second consecutive month in October as the economy continued to feel the pull of the credit crisis, according to a report by the Institute for Supply Management. The ISM manufacturing index fell to a reading of 38.9 in October, from 43.5 in September, which was the worst reading for the index since September 1982. The ISM index was 49.9 in August. Index readings that come in below 50 indicate that the sector is contracting. The ISM's measure of new factory orders fell 6.6 points to 32.2. The production index fell 6.7 points to a reading of 34.1, while the index that measures the cost of raw materials fell 16.5 points to a reading of 37. "It appears that manufacturing is experiencing significant demand destruction as a result of recent events, with members indicating challenges associated with the financial crisis, interruptions from the Gulf hurricane and the lagging impact from higher oil prices," Norbert Ore, chairman of the Tempe, Ariz.-based ISM's Manufacturing Business Survey Committee, said in a statement.