US factory output plummets again

US manufacturing has now contracted for four months in a row

US manufacturing activity fell in November to a fresh 26-year low, the latest figures from the Institute for Supply Management (ISM) have shown.

For the second month in succession, figures have hit lows last seen in 1982, with activity declining to 36.2 in November from 38.9 in October.

Since any figure below 50 indicates a contraction, it is the latest sign that the US economic downturn is worsening.

Levels of new orders were even worse, said ISM, falling to a 28-year low.

'Serious blow'

US manufacturing output has now contracted for four months in a row.

The figures suggest that the US economy is likely to contract again in the fourth quarter of the year, putting the US into recession.

"This is another serious blow to manufacturing," said Pierre Ellis, senior economist at Decision Economics.

"Declines in demand are outpacing the declines in production."

The ISM also found that prices manufacturers paid to their subcontractors fell to their lowest levels since 1949, dropping to 25.5 in November from 37 in October.

"Price adjustment is what will ultimately bring the economy back, but the immediate pain is severe," added Mr Ellis.