Manufacturing growth slows in January

[NEW YORK] Factory activity in the United States expanded in January at the weakest pace in eight months as orders slumped, a sign manufacturing cooled at the start of the year along with the weather.

The Institute for Supply Management's (ISM) factory index decreased to 51.3 from 56.5 the prior month, the Tempe, Arizona-based group's report showed yesterday. The median forecast of 85 economists surveyed by Bloomberg called for a decrease to 56. Readings above 50 indicate expansion.

Colder-than-normal temperatures in the US and weakness in some emerging markets helped slow factory demand last month. Sustained gains in consumer purchases, improvement in the labour market and a pick-up in capital spending will be needed to keep assembly lines humming in the world's biggest economy. Manufacturing accounts for about 12 per cent of the economy.