Manufacturing activity hits two-year low

Manufacturing activity grew at the slowest pace in two years last month as a strong dollar and low oil prices continued to weigh on the industry.

An index of factory activity slipped to 50.2% from 51.1% the previous month. lowest since May 2013, the Institute for Supply Management said Thursday. A reading above 50 means the sector is expanding, while below 50 indicates contraction.

Economic weakness in China and that country's recent decision to devalue its currency has further bolstered a dollar that already was rising because of the relative strength of the US economy amid troubles around the globe. A muscular greenback hurts manufacturers' exports by making them more expensive for overseas customers.

Meanwhile, low crude prices have dampened drilling activity and demand for related steel and other products. Those struggles have been partly offset by the home construction recovery and brisk auto sales.

In September, measures of new orders, production and employment all fell modestly but remained in expansion territory. But of 18 sectors, only seven reported growth, including printing, textiles, furniture and paper products. Eleven contracted, including primary metals, fabricated metals, apparel, wood products, and computers.