Manufacturing activity in the US expanded at the weakest pace in seven months in May 2013, raising fears of a deepening slowdown in the world's biggest economy.
The gauge measuring US manufacturing fell to 51.9 this month from 52.1 in April 2013, with a reading above 50 signaling expansion, Markit Economics said in a report on Thursday.
This was the second month running when the headline PMI fell as output and employment expanded at a slower pace even as new orders picked up.
Weak overseas demand took toll on production activity in the manufacturing sector as new export orders declined.
A deepening slowdown in China and a recession in Europe is curbing demand for American factory shipments.
Further, the massive USD 85 billion across-the-board federal spending cuts are also weighing on the demand for factory goods as government consumption declines.
The weakness in the manufacturing sector underscores the sluggishness in the US economy, and may prompt the Federal Reserve to continue with its existing bond buying program for the next few months.
Fed Chairman Ben Bernanke said this week that a premature withdrawal of QE may have an adverse impact on the economy.
"With the PMI hitting a seven-month low, the U.S. manufacturing economy continues to show signs of weakening", Markit said.