US manufacturing growth slows in October, disrupted by government shutdown

NEW YORK: US manufacturing grew at its slowest pace in a year this month and factory output contracted for the first time since late 2009, an industry report showed on Thursday.

Financial data firm Markit said its "flash," or preliminary, U.S. Manufacturing Purchasing Managers Index fell to 51.1, the lowest since October 2012, from 52.8 in September.

Output declined for the first time in more than four years, with the subindex dipping to 49.5 from 55.3. A reading below 50 indicates contraction.

The survey was conducted partly during a 16-day U.S. government shutdown that economists expect will slow overall U.S. growth slightly in the last three months of 2013.

"It is impossible to disentangle the impact of the shutdown from other factors that might have been at play during the month," said Markit chief economist Chris Williamson.

But he said the survey "suggests that the disruptions and uncertainty caused by the crisis hit companies hard."

New orders were placed at their slowest pace since April, though hiring increased for a fourth straight month with a reading of 52.3 in October.

"A number of firms linked additional hiring to new product developments," according to the survey release. Still, the rate of job creation remained modest.

Markit's "flash" reading is based on replies from about 85 per cent of the U.S. manufacturers surveyed. A final reading will be released on the first business day of the following month.