US manufacturing growth slowed in September to its weakest pace in more than two years amid a decline in orders, as well as easing price pressures, according to an industry survey released Monday.
The Institute for Supply Management said its manufacturing index dropped 1.9 points to 50.9 percent, well below expectations and just barely above the 50-percent threshold indicating expansion.
It was the weakest result since May 2020, ISM said.
“The US manufacturing sector continues to expand, but at the lowest rate since the pandemic recovery began,” ISM manufacturing survey chair Timothy Fiore said in a statement.
After companies surveyed for the past four months have reported “softening new orders rates, the September index reading reflects companies adjusting to potential future lower demand,” he said.
The new orders index fell sharply, sinking into contraction territory at 47.1 percent, though production edged up slightly, the report said.
The prices index also fell, still showing rising prices at 51.7 percent, but posting the lowest reading since June 2020.
Seven of the industries surveyed contracted compared to August, while nine reported growth.
“Concerns of global economic slowdown are growing, and (we are) experiencing some customers pulling back orders,” a chemical products firm said.
Several others pointed to ongoing supply chain issues hampering output.
Factory employment slowed sharply, and while Fiore said there was an uptick in hiring freezes, “Markedly absent from panelists’ comments was any large-scale mentioning of layoffs; this indicates companies are confident of near-term demand.”