US factory growth slows in August, ISM survey shows

US manufacturing activity expanded more slowly in August, with new orders and imports weakening, the Institute of Supply Management said Tuesday.

The ISM manufacturing index fell to 54.6 percent, down one percentage point from July, when it reached a four-year high. Readings above 50 percent indicate expansion.

ISM survey head Susan Spence said manufacturing remained in expansion territory but had “lost ground” in key measures, including new orders, backlog and imports.

The index has stayed above the 50-percent line for eight months, although US manufacturing growth has been sluggish.

The August reading was below the 55.3 expected by economists polled by Dow Jones Newswires and The Wall Street Journal.

ISM said 58 percent of survey respondents expressed negative sentiment, pointing to uncertainty even as activity increased. Respondents cited pricing volatility, the war with Iran and tariffs.

One respondent in the chemical industry said companies were making new products but struggling to compete when prices rose because of tariffs and the conflict in the Strait of Hormuz. The respondent said inflation from those factors could lead to lower sales and lower customer spending power.