For the more relevant manufacturing segment of the overallindustrial sector, the picture was generally negative. "For thefirst quarter as a whole, manufacturing output was down 0.5%, andthis follows a decline of 0.6% in the fourth quarter of 2007," theeconomist points out. Though the manufacturing situation in Marchwas improved over January and February, it was hardly worthbragging about. According to the latest Manufacturing ISM Report onBusiness from the Institute for Supply Management in Tempe, AZ,even as the overall US economy grew for the 77th consecutive month,economic activity in the manufacturing sector remained stagnant inthe final month of Q1.

"The manufacturing sector failed to grow in March as the PMI(Production Manufacturing Index) fell below 50% for the secondconsecutive month," says Norbert Ore, chair of the institute'sManufacturing Business Survey Committee. "This completes theweakest quarterly performance for the US economy since Q2 of 2003.Manufacturers' order backlogs continue to erode as the New OrdersIndex failed to grow for the fourth consecutive month.Additionally, manufacturers continue to experience heavy costpressures, as the prices they pay are still rising even with sloweroverall demand."

Additional slowdowns can be expected. A new report fromIndustrial Info Resources Inc. in Sugar Land, TX says that whilespending within the nation's industrial manufacturing industry overthe last nine months closely matched that for the preceding ninemonths, each of the past three quarters has seen a decline.According to IIR statistics, capital and maintenance projectcompletion descended from $8.6 billion in Q3 '07 to $7.8 billion inQ4 and $7 billion in Q1 '08. A bigger percentage drop is predictedfor Q2.