By Armando Duke

(AXcess News) Houston - The Institute of Supply Management (ISM) December Survey revealed that the manufacturing sector continued to show no sign of growth for the fifth consecutive month while the overall U.S. economy shrank for the third month in a row.

ISM chairman of the Committee Survey Norbert J. Ore said manufacturers across the entire spectrum of companies saw a "significant decline" in activity during the month of December.

"The decline covers the full breadth of manufacturing industries, as none of the industries in the sector report growth at this time," said Ore.

The ISM noted that the Performance by Industry index (PMI) shrank 3.8% in December over the prior month to 32.4 from 36.2 in November.

New manufacturing orders shrank 5.2% in December with the ISM Survey's index of New Orders at 22.7 compared to 27.9 the previous month.

The ISM said production fell 6% in December to an Index reading of 25.5 from 31.5 the prior month.

The Survey indicated that employment was also down.  The Employment Index in December was 29.9 compared to 34.2 the prior month, a decline of 4.3%.

Manufacturers inventory levels shrank 0.3% to 38.8 in December compared to 39.1 the prior month, though customer inventories rose 2% to an index reading of 57 in December compared to a reading of 55 the prior month, indicating that goods were piling up and that new orders in January would likely continue to decline.

Overall, the ISM indicated that the U.S. economy was continuing to slow.  The ISM said that New Orders shrank for the 13th consecutive month to their lowest level on record since January 1948.  Order backlogs have fallen to the lowest level since ISM began tracking the Backlog of Orders Index in January 1993.

"Manufacturers are reducing inventories and shutting down capacity to offset the slower rate of activity," Ore indicated.