WASHINGTON (AP) - U.S. factory activity grew last month at its slowest pace since May 2013 as manufacturers pared their stockpiles and cut jobs.
The Institute for Supply Management said Monday that its index of factory activity slipped to 50.1 in October from 50.2 in September. The figures barely signal growth, which is any reading above 50.
U.S. manufacturers have been squeezed this year as a strong dollar and weak economies in China and other key foreign markets have cut into exports. A high dollar makes U.S. goods pricier overseas while lowering prices for imports that compete with American products.
Monday's report showed that a measure of hiring fell sharply, from 50.5 to 47.6. That means manufacturers cut jobs last month.
Still, the report contained some bright signs: New orders jumped, suggesting that business may pick up in coming months. And a gauge of production rose for the first time since July.
"We're hopeful this will mark the low," Ian Shepherdson, an economist at Pantheon Macroeconomics, said in a note to clients. "It looks as though the downshift in manufacturing activity may be coming to an end."
Both manufacturers and their customers are cutting back on stockpiles, which slows production as companies sell existing goods rather than order new ones. But that trend slowed last month and may soon be complete, said Bradley Holcomb, chair of the ISM's manufacturing survey committee.
Sharp declines in oil and natural gas prices have led drilling companies to reduce orders for steel pipe and other equipment used to build rigs. That trend, combined with the strong dollar, has helped lower the ISM's index from roughly 57 late last year to 50.1.