Manufacturing in the United States shrank in December at the fastest pace in almost three decades as the recession deepened and spread overseas, Bloomberg reported.

The Institute for Supply Management’s factory index fell to 32.4, less than forecast and the lowest level since 1980, from 36.2 the prior month, the Tempe, Ariz.-based private group said today. Readings less than 50 signal contraction. The group’s price measure fell to the lowest level in almost six decades.

Clogged credit markets, the collapse in housing and mounting job losses have hurt demand for everything from furniture and appliances to automobiles, driving General Motors Corp. and Chrysler LLC to the brink of bankruptcy. The slump will extend into 2009 as downturns in Europe and Japan also depress exports.

“It’s a breathtaking plunge in manufacturing,” said Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, whose estimate tied for lowest among economists surveyed. “The exports numbers are reflecting recessions abroad. The world is very much coupled.”

The factory index, which covers about 12 percent of the economy, was projected to drop to 35.4, according to the median estimate of 57 economists surveyed by Bloomberg News. Forecasts ranged from 34 to 40, and the measure averaged 51.1 in 2007.

Manufacturing deteriorated around the world in December, signaling a worsening global recession, other reports today showed. The euro-area’s gauge fell to a record low, while industry in China contracted for a fifth month. Indicators for the U.K., Sweden, Hong Kong and Australia also showed factories in decline.