May 2, 2009

US factory output continues fall

US manufacturing activity fell further in April - but at a slower pace - figures from the Institute for Supply Management (ISM) have suggested.

Its index of national factory activity rose to 40.1 in April from 36.3 in March, with any figure below 50 indicating a contraction.

The easing of the slowdown was greater than most analysts had predicted.

However separate Commerce Department data said US factories orders dropped by 0.9% in March - more than expected.

Factory shipments fell for a record eighth consecutive month, it added.

Analysts said that both sets of data were further evidence of the severity of the recession.

However oil prices rose sharply as traders took encouragement from the ISM figures that the deterioration in the US manufacturing sector appeared to be slowing.

US light sweet crude jumped by $2.08 to settle at $53.20 a barrel while London Brent crude added $2.05 at $52.85.

Little improvement

Earlier this week, official data showed that the US economy continued to contract in the first quarter of 2009, led by the biggest fall in exports for 40 years.

US GDP contracted at an annualised rate of 6.1% during the quarter, little improvement on the 6.3% fall in the last three months of 2008.

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