US Manufacturing Orders Hit 60-Year Low

The decline in U.S. manufacturing accelerated in December as demand for cars, appliances, furniture and other goods that we still actually MAKE reached the lowest level since at least 1948. This virtually ensures there will be more cutbacks in factory jobs and production for 2009.

The Institute for Supply Management’s factory index fell to 32.4, below economists’ forecasts and the lowest level since 1980, from 36.2 the prior month. Readings less than 50 signal contraction. The group’s new-orders measure reached the lowest level on record and prices slid the most since 1949. Mark Vitner, Sr. Economist at Wachovia Corp told Bloomberg that:

“Every component suggests that the weakness is going to carry over into 2009. There’s just not a whole lot of new business coming in, and companies will have a painful adjustment as consumers shun spending.”

Barack Obama’s plans for an unprecedented stimulus package are what many manufacturers are holding out hope for. Obama has pledged an investment program in roads, schools and the U.S. energy network akin to the 1950s- era interstate highway construction boom. How this spending will help car and furniture makers is beyond me. We’ve already seen the manifestation of global mistrust in the U.S. financial markets…China’s not going to buy our treasuries anymore, and all of the billions government has squandered already aren’t helping AT ALL. America used to be the buyer of last resort for the world, but that has all changed. We are so over our heads domestically, that we can only watch and wring our hands at the global economic slump engulfing much of the world.

The report showed the impact of recessions abroad: exports fell to the lowest level since that series began in 1988. Separate figures today showed business at European factories contracted in December by the most on record. Manufacturing declined in China for a fifth month in December, for an eighth month in the U.K., for a seventh month in Australia and at the fastest pace in at least 14 years in Sweden. The figures confirm there has been a sharp contraction in global investment, output and trade activity, making this the deepest global recession since at least the early 1980s.

The U.S. Treasury this week issued broad guidelines for aid to the auto industry, opening the door to using taxpayer money to finance a wider array of companies, such as GM’s bankrupt former parts unit Delphi Corp. The total that government has already committed from OUR pockets has now reached over 8 TRILLION DOLLARS. This is beyond insanity.

The factory slump has spread well beyond autos as demand from abroad also weakens. Ingersoll-Rand Co., the maker of Thermo King and Hussmann refrigeration equipment, said last month that profit will fall short of fourth-quarter and full-year estimates after demand declined “sharply” in North America and Western Europe.

U.S. exports dropped in October for a third straight month, leading to an unexpected widening in the trade gap, figures from the Commerce Department last month showed. The drop indicated the economy was sinking even faster than previously estimated. Why this drop was unexpected just highlights the velocity of the worsening problem. We cannot spend our way out of this mess! All we are doing is exacerbating it by throwing more BORROWED money in every conceivable direction.

Obama’s “solution” is a classic liberal one that completely ignores the lessons of history and the Great Depression. God only knows what our economy will look like this time next year if he is allowed to push his plan through. Republicans in congress are trying to block his stimulus plan. Call your representatives and let them know that you say NO to more deficit spending! Click here to communicate with the House of Representatives, and here to send a message to your Senators.

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