Economic activity in the U.S. manufacturing sector in October reached its lowest level in 26 years, as measured by the Institute for Supply Management (ISM). The organization's manufacturing index of 38.9 is the lowest number since September 1982, when it registered 38.8 percent; any number below 50 indicates contraction. "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," says Norbert J. Ore. CPM, chair of ISM's Manufacturing Business Survey Committee. The October figure was significantly lower than the September index of 43.5 and far lower than industry analysts' average prediction of 41.5. The ISM says only two industries reported growth in October: apparel, leather, and allied products; and computer and electronic products. Industries reporting contraction include petroleum and coal products; transportation equipment; miscellaneous manufacturing; electrical equipment, appliances, and components; and food, beverage, and tobacco products.
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