Factories grow at slowest pace in 2½ years; construction spending up 0.6%
WASHINGTON - U.S. factory activity grew last month at its slowest pace since May 2013 as manufacturers pared their stockpiles and cut jobs.
The Institute for Supply Management says its index of factory activity slipped to 50.1 in October from 50.2 in September. The figures barely signal growth, which is any reading above 50.
A measure of hiring fell sharply, from 50.5 to 47.6. That means manufacturers cut jobs last month.
Still, the report contained some bright signs: New orders jumped, suggesting that business may pick up in coming months. And a gauge of production rose for the first time since July.
U.S. manufacturers have been squeezed this year as a strong dollar and weak economies in China and other key foreign markets have cut into exports.
In a separate report, U.S. construction spending rose 0.6% in September to the highest level since March 2008, pushed up by a surge in apartment building.
The Commerce Department said Monday that spending on construction rose to a seasonally adjusted annual rate of $1.09 trillion. Construction of apartments and condominiums jumped 4.9% in September from August, while construction of single-family homes rose 1.3%. Overall, private residential construction rose to the highest level since January 2008.
The housing market has proven relatively resilient this year amid economic weakness overseas that has hurt American manufacturers and limited hiring. Commerce reported last week that private investment in housing grew at an annual pace of 6.1% from July through September — four times the 1.5% growth registered by the overall economy.
Spending on nonresidential construction slipped 0.1% in September. But spending on construction of churches and other religious buildings rose 5.6%.
Public construction grew 0.7% from August. Spending on schools and other educational buildings rose 2.4%, and spending on water supply facilities was up 4.8%.
Federal construction spending fell 1%, the biggest decline since a 4.4% drop in June.