WASHINGTON (AP) - U.S. factory activity grew at the slowest pace in six months in December, weakened by declines in orders and production. Yet growth remained healthy, a sign manufacturing may help drive the economy's expansion in 2015 as it did last year.
WASHINGTON (AP) — U.S. factory activity grew at the slowest pace in six months in December, weakened by declines in orders and production. Yet growth remained healthy, a sign manufacturing may help drive the economy's expansion in 2015 as it did last year.
The Institute for Supply Management, a trade group of purchasing managers, said Friday that its manufacturing index fell to 55.5 in December from 58.7 in November. Any reading above 50 signals expansion. November's figure was just below a three-year high reached in October.
December's reading is the lowest since June. But it is also close to the average for all of 2014 and remains at a solid level.
Despite the slowdown, a measure of employment rose, suggesting factories likely added jobs last month. And gauges of new orders and production dropped sharply but were still firmly in expansion territory.
One reason for the weaker reading could be a work slowdown by unions at West Coast seaports, including San Diego and Seattle. That has interrupted shipments of raw materials. Some manufacturing firms blamed the disruption for slowing their output, the ISM's survey found.
Other recent data on U.S. manufacturing has been modestly positive.
Factory production jumped in November, surpassing its pre-recession peak, the Federal Reserve said earlier this month. Strong auto manufacturing, spurred by healthy car sales, boosted output.
Meanwhile, demand for long-lasting factory goods slipped in November for the third time in four months, according to the Commerce Department.
The drop was driven mostly by lower orders for military goods. A category that economists view as a proxy for business investment spending — which excludes volatile aircraft and defense orders — was flat last month. That marks an improvement from declines of 1.9 percent in October and 1.1 percent in September.