Figures above 50 are an indication of growth in the sector while below 50 indicates slowdown. In the previous report, the headline index fell nearly four points to 38.9.

New orders fell more than six points to 27.9 from 32.2, marking the 12th straight month of slowdown and the lowest level since 1980.

Production fell more than six points to 31.5 from a previous 34.1 reading, marking the third month of severe slowdown.

The ISM employment component remained in deep contraction at 34.2 from the previous 34.6 level, representing a third month of protracted slowdown and the worst level since 1991.

On the positive side, prices continued to moderate for the sixth month in a row, coming in at 25.5, the lowest level since 1949. Over the past three months, prices have fallen dramatically from a 91.5 reading in June.

Norbert J. Ore, chair of the ISM's Survey Committee, said the index "indicates a continuing rapid rate of contraction in manufacturing." He noted that order backlogs have fallen to the lowest level since ISM began tracking the Backlog of Orders Index in January 1993.

Historically, a headline index above 41.1 in the manufacturing industry is consistent with overall growth in the broader economy, according to the index.

By Patrick McGee, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it

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