US manufacturing grew at its slowest pace in two years in October, according to data released by Institute for Supply Management (ISM).
The group reported a fourth consecutive month of declines in factory activity, with growth at its slowest pace since May 2013.
The index stood at 50.1. Any number above 50 is considered expansion.
The strong US dollar has hurt exports and caused a number of job cuts at plants across the country.
According to the ISM, the number of manufacturing jobs declined by 8% last month compared to September.
The index for new orders rose to 52.9 up from 50.1, suggesting the slowdown may end in the coming months.
A decrease in spending by the oil industry has also taken its toll on manufacturing and is likely to continue to do so, analysts said.
“Until oil prices rebound significantly and stay high for a while you’re unlikely to see a boost in their capital expenditures,” said Dan North chief economist for Euler Hermes North America, the largest provider of trade credit insurance.
Construction growth
He added that the strong dollar and global economic slowdown are also worrying for the industry.
“We expect that in the long term we will still have a strong dollar. Combine that with global weakness and our exports will still suffer,” Mr North said.
Separately, the US Commerce Department also reported a seven year high in construction spending.
It said that spending on new homes, highways, offices and other facilities was up 14.1% from the year before.
Both private and public sector spending was up.
Private home construction – the largest section of the industry- was up 17.2% compared to the previous year.