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US factories grew last month at slowest pace in a year

In this Nov. 11, 2014 photo, Tom Peters looks at material for roof rails on the production line for the 2015 Ford F-150 at the Dearborn Truck Plant in Dearborn, Mich. The Institute for Supply Management reports on a survey about U.S. manufacturing production, orders and other activity in January, on Monday, Feb. 2, 2015. (AP Photo/Paul Sancya) In this Nov. 11, 2014 photo, Tom Peters looks at material for roof rails on the production line for the 2015 Ford F-150 at the Dearborn Truck Plant in Dearborn, Mich. The Institute for Supply Management reports on a survey about U.S. manufacturing production, orders and other activity in January, on Monday, Feb. 2, 2015. (AP Photo/Paul Sancya)

By Associated Press February 2, 2015 1 min read

WASHINGTON (AP) – US factories expanded last month at the slowest pace in a year, as orders, production, and hiring all declined.

The Institute for Supply Management, a trade group of purchasing managers, says its manufacturing index fell to 53.5 in January from 55.1 in December. That is the third straight drop and lowest since January 2014. Any reading above 50 signals expansion.

Several trends are slowing factory output: Overseas economies are faltering and the dollar has increased in value, cutting export demand. And the sharp drop in oil prices since last June has driven U.S. oil and gas drillers to order less drilling equipment and machinery.

New orders are still growing, but at the slowest pace in a year, the survey found. Factories added jobs, but at the weakest pace since June.