The Institute for Supply Management’s factory index declined to 50.8 in October from 51.6 in the previous month. While any reading above 50 indicates the industry is still expanding, a reading of just 50.8 shows the sector to be growing at a slower and slower pace.
Today’s ISM report surprised economist, who had projected the gauge would climb to 52, according to a Bloomberg news survey. An index above 42.5 generally indicates an expansion in the overall economy.
The decline in the index dovetails with other economic reports showing that the manufacturing industry has cooled after a period of rapid growth. A Chinese factory index dropped to the lowest level since February 2009 while a U.K. manufacturing gauge declined to a 28-month low.
The China Federation of Logistics and Purchasing announced today that its Purchasing Managers’ Index fell from 51.2 in September to 50.4 in October. The U.K. manufacturing index, based on a survey by Markit Economics and the Charter Institute of Purchasing and Supply, dropped from 50.8 in September to 47.4 last month.