New York ? U.S. manufacturing activity contracted in November for a third consecutive month, reflecting softness in new orders, a private industry group said Monday.

The Tempe, Ariz.-based Institute for Supply Management said its index of business activity was 49.2 in November, a slight improvement from the 48.5 reading in October, but still below 50. A reading above 50 signals the manufacturing sector is growing; a reading below 50 suggests the sector is contracting.

Analysts had forecast a reading of 51 for the month. The last time the index was above 50 was in August.

“The sector continues to need drivers that will help end the stagnation,” said Norbert J. Ore, who oversees the monthly survey for the group.

Many of the purchasing managers surveyed expressed concerns that their business was “flat.” There was also anxiety about the dock lockout on the West Coast, as well as the possibility of a war with Iraq.