The Institute for Supply Management (ISM) released its purchasing manager's survey for October 2008, indicating U.S. manufacturing is suffering from a much steeper decline than previously expected.

In the ISM's survey, a reading of below 50 indicates the industry is in contraction, while over 50 indicates expansion. Indicators below 41 are generally agreed to have only come during a recession.

In September, the ISM survey registered 43.5, indicating manufacturing contraction is continuing.

However, October's manufacturing index was even worse. While analysts had generally agreed it could be as low as 42, the actual index came in at a disappointing 38.9. This is the index's lowest level since the recession of 1982.

Exports, which had been a 70-month-long, over-50 bright spot for manufacturers, unexpectedly dropped 11 points from 52 in September, to just 41 in October. The rapid export contraction is seen as a particularly ominous long-term signal -- indicating economic troubles are not only spreading wide across the globe, but also that the troubles have deepened to where fundamental industries worldwide are now feeling the effects and taking action.

Norbert Ore, Chairman of the Institute for Supply Management's Manufacturing Business Survey Committee, said: "It appears that manufacturing is experiencing significant demand destruction as a result of recent events, with members indicating challenges associated with the financial crisis, interruptions from the Gulf hurricane, and the lagging impact from higher oil prices."