ISM Manufacturing Index Contracts for First Time in Three Years

December 1, 2006 11:25 AM, EST

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he Institute for Supply Management said Friday its November manufacturing index contracted for the first time in more than three years, falling to a reading of 49.5.

The index, which measures U.S. manufacturing activity, fell from a reading of 51.2 in the prior month, Commerce said.

ISM indices are set where a reading of above 50 indicate growth and below 50 show contraction.

The group’s prices paid index rose to 53.5 in November from 47 in October. The October reading was the lowest since February 2002. The new orders index, meanwhile, fell to its lowest level since April 2003, dropping to 48.7 from 52.1 a month before.