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US manufacturing activity slowed in March but remained in expansion territory for the fourth month in a row, the ISM report released Monday showed.
The Institute for Supply Management said its manufacturing index fell to 51.3 in March from 54.2 in February, reflecting slower growth in most of the sectors surveyed, with a notable exception in employment.
The March reading on the index, based on a nationwide survey of manufacturing purchasing executives, was weaker than expected. On average, most analysts expected the PMI to dip to 54.0.
Nevertheless, manufacturing seemed to be on a solid growth trajectory after the PMI hovered around the 50 break-even line between growth and contraction in the second half of 2012.
The February reading was the highest since June 2011.
Of the 18 manufacturing industries surveyed in March, 14 reported growth, compared with 15 in February.
Jennifer Lee, senior economist at BMO Capital Markets, highlighted that the report was mixed, with new orders and production taking "a sizeable drop" to three- and six-month lows.
Employment hit a nine-month high, "some good news" ahead of the government's March jobs report on Friday, Lee said.