The September U.S. manufacturing growth slowed to its lowest point in two years, nearing a point of stagnation due to a decline in orders, according to a gauge released on Monday.
The Institute for Supply Management manufacturing survey showed a nearly 2 point drop to 50.9%, which is a drop below expectations and is the lowest growth since May 2020, according to the data released on Monday. The index has an order contract for the third time in four months.
New orders reached the lowest point since the epidemic, contracting more than 4 points to 47.1%, indicating consumer spending is declining.
The September index reading reflects companies adjusting to lower demand, according to Timothy Fiore, chair of ISM's Manufacturing Business Survey Committee, after four consecutive months of panelists reporting softening new orders rates.
He said the U.S. manufacturing sector continues to expand but at the lowest rate since thepandemic recovery began. The survey said nine manufacturing industries saw a lot of growth last month, including mineral products, machinery and plastics. ISM reported that seven industries contracted, such as furniture, textiles and wood.
There was a rise in hiring freezes across the manufacturing sector as a result of the decrease in factory employment.
Fiore stated that companies are confident in near-term demand, despite the large-scale mentioning of layoffs.