December 4, 2001	Tuesday	Ramazan 18, 1422

NEW YORK, Dec 3: The nation’s manufacturing sector continued to contract in November for the 16th straight month, though not as much as expected, raising the prospect it is finally poised for recovery.

The Tempe, Arizona-based National Association of Purchasing Management, said on Monday its index of business activity rose to 44.5 in November from 39.8 in October, its lowest point in nearly 11 years. Analysts had been expecting a reading of 39.

An index above 50 signifies growth in manufacturing, while a figure below 50 shows contraction.

“After absorbing last month’s aftershock of the terrorist attacks, the manufacturing sector showed surprising resilience in November,” said Norbert J. Ore, who oversees the monthly report.

Ore said he was encouraged with the results, particularly the new orders component of the index, which had one of its best-ever increases of 10.5 percentage points. However, it’s too soon to tell whether manufacturers are headed for a quick recovery, he added.

“The manufacturing decline is now in its 16th month, and even with this month’s signs of encouragement, it takes time to build a recovery across the sector,” Ore said.

The NAPM measure is closely tracked because it offers an early reading on the health of the manufacturing sector in November. Its index is based on a survey of purchasing executives who buy the raw materials for manufacturing at more than 350 companies.

Separately, the Commerce Department reported on Monday that personal spending rose by record 2.9 per cent in October, led by a surge in purchases of autos and other durable goods. But personal income failed to rise October for the second straight month, reflecting the huge number of layoffs in following the Sept 11 terrorist attacks.

Another report showed construction spending rose 1.9 per cent in October, first monthly gain since April.

The markets were lower following the reports, with the Dow Jones industrial average off 143 points to 9,709 and the Nasdaq down 25 points to 1905.

The manufacturing sector has been particularly hard hit this year and began its decline long before other segments of the economy.

The National Bureau of Economic Research last week confirmed that the country had entered a recession last March, the first downturn in a decade. The government also reported that total economic activity fell at an annual rate of 1.1 per cent in the July-September quarter.—APP