WASHINGTON — US manufacturing shrank for the second straight month in July, further evidence of an economy growing at a sluggish pace.
The Institute for Supply Management, a trade group of purchasing managers, said Wednesday that its index of manufacturing activity ticked up to 49.8, from 49.7 in June.
A reading below 50 indicates contraction. June was the first time the survey showed manufacturing contracted in three years.
The reading points toward more slow growth but not another recession. The trade group said the index needs to fall below 43 to signal a recession is likely.
The July report also showed factories hired in at a slower pace than June, while new orders declined more slowly. And export orders fell to the lowest level since April 2009, evidence of slower global economic growth.
Manufacturing has been a key source of growth in the United States since the recession ended in June 2009. But in recent months, factory activity has weakened along with the broader economy.
Job growth has slumped and US consumers and businesses have cut back on spending, lowering demand for factory goods. Europe’s economic woes and slower growth in China, India, and Brazil have reduced demand for American exports.
Factories have been a key source of jobs and growth since the recession ended in June 2009. They have benefited from rising exports and a sharp increase in US auto sales.
Manufacturers added an average of only 10,000 jobs a month in the April-June quarter. That was much lower than the average of 41,000 in the first quarter.
Other recent reports on manufacturing have been mixed. The Federal Reserve said earlier this month that factory output rose in June as the production of cars, machines, and business equipment rose. That followed a drop in May. Overall, manufacturing output rose at only a 1.4 percent annual rate in the second quarter, after a jump of 9.8 percent in the first three months of the year.