Manufacturing growth slowed in October from the previous month, a troubling sign that factories are struggling in the weak economy, according to an Associated Press report.
The Institute for Supply Management says its manufacturing index dropped to 50.8, down from 51.6 in September. Any reading above 50 indicates expansion.
Measures of production and exports fell and a gauge of employment dipped. On a positive note, survey respondents say raw materials prices fell sharply.
Factories were among the first businesses to start growing after the recession officially ended in June 2009. The manufacturing sector has grown for 27 straight months, according to the index.
However, factory activity slowed this spring. Consumers cut back on purchases in the face of higher prices for gas and food. And the March earthquake in Japan disrupted supply chains, which slowed U.S. auto production.
The index hit a two-year low of 50.6 in August, contributing to fears that the economy was at risk of slipping into recession. A gain in September was among data that helped calm those worries. Last week, the government said that the economy expanded at an annual pace of 2.5 percent in the July-September quarter, the best quarterly growth in a year.
Companies are buying more industrial machinery and heavy equipment, a positive sign for factory growth. Business spending on equipment and software was a key driver of growth in the third quarter.