The preliminary results of Markit's October Purchasing Manager Index survey were worse than expected.
The headline index fell to 51.1 from September's 52.8 reading, marking the lowest level in a year. Economists predicted a smaller drop to 52.5.
Any reading above 50 indicates expansion, whereas sub-50 readings indicate contraction — so today's report suggests the pace of expansion in American manufacturing slowed significantly in October.
The table at right shows changes in the various sub-components of the report.
Most notably, the output sub-index plummeted to 49.5 from 55.3, marking the first contraction in manufacturing output since September 2009.
The new orders sub-index fell to 51.6 from 53.2, the weakest reading in 6 months.
"A number of manufacturers linked lower levels of output to a weaker trend for new orders," said Markit in the release. "Incoming new work increased modestly in October, but at the slowest rate in six months. The easing in the rate of total new order growth generally reflected weaker domestic demand, according to panellists."
Backing claims that lackluster domestic demand was driving the slowdown was the fact that the new export orders sub-index rose to 50.7 in October from 49.0, suggesting an improving picture overseas.
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