STOCK MARKET WATCH -- Monday, 1 October 2012

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38. U.S. Manufacturing Probably Shrank as Global Economy Cooled

http://www.bloomberg.com/news/2012-10-01/manufacturing-in-u-s-probably-shrank-as-global-economy-cooled.html

Manufacturing in the U.S. probably contracted in September for a fourth straight month, showing an industry that’s hobbled by a global economic slowdown, economists said before a report today.

The Institute for Supply Management’s factory index was little changed at 49.8 last month from 49.6 in August, according to the median estimate of 68 economists surveyed by Bloomberg. A reading of 50 is the dividing line between expansion and contraction. Construction spending probably climbed in August, another report may show.

Less export demand and cutbacks in household spending are persistent headwinds for manufacturers such as Caterpillar Inc. and Worthington Industries (WOR) Inc. Production is also being restrained by companies putting off equipment purchases on concerns automatic government spending cuts and higher taxes will go into effect next year and slow the economy.

“Europe is still a big problem out there, you’re seeing weaker global growth in general,” said Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Florida. “A lot of firms doing business in Europe are reporting weaker results, a lot more caution.”