An index of US factory activity has declined for four straight quarters and indicates the pace of activity will continue slowing for the next three to six months, a manufacturing industry group said.

The September composite index of activity complied by the Manufacturers Alliance/MAPI fell to 48 per cent in September and below 50 per cent for the first time since December 2001 when it was 40 per cent in the aftermath of the attacks of September 11, reports Reuters.
“Events in the financial markets since mid-September will likely amplify the downturn in manufacturing activity in the United States and abroad,” said Donald Norman, MAPI economist and survey coordinator.
This is down from the 50 per cent reported in MAPI’s quarterly survey on the business outlook released in June. The survey reflects the views on current and future business conditions of 71 financial executives.
Barring a prolonged contraction in Europe and Asia, US manufacturing exports should hold up reasonably well, preventing as sharp a contraction as that which occurred between mid-2000 through the remainder of that year, the group said.
Indexes providing guarded optimism for 2009 include the non-US investment index, the prospective (non-US) shipments index, the export orders index, the annual orders index, and the inventory index, the survey showed.
The non-US investment index, which asks about companies’ plans for capital spending outside the United States, was 64 per cent in September, down from 77 per cent for June survey.
The fall in the index indicates that fewer companies expect investment to rise in 2009 than was the case for 2008, the survey said.
The prospective (non-US) shipments index, based on a comparison of expected shipments in the fourth quarter of 2008 with the fourth quarter 2007, fell to 73 per cent in September from 89 per cent in June, but remains well above the 50 per cent watermark dividing expansion from contraction.
The export orders index rose to 76 per cent in September from 73 per cent in June, while the annual orders index — based on expectations for all of 2009, fell to 58 per cent from 78 per cent for the same period a year ago, the survey said.
The inventory index fell to 58 per cent in September from 69 per cent in June, a sign manufacturers are making progress in reducing excess inventories, the group said.