NEW YORK -- The nation's manufacturing sector grew at a slightly slower pace in April, in part because of escalating costs for materials, an industry group reported Monday.
The Institute for Supply Management said its manufacturing index registered 62.4 in April, compared with a reading of 62.5 in March. The new reading was below the expectations of analysts, who had forecast a reading of 62.7.
An index reading above 50 indicates expansion, while one below 50 indicates that manufacturing activity is contracting. The ISM said that this is the 11th consecutive month that the index has indicated the economy is expanding.
Despite the lower-than-expected reading, analysts said the ISM report was still encouraging.
"The (manufacturing) index is still at a very high level, and this was an insignificant change," said Alexander Paris, economist and market analyst for Chicago-based Barrington Research who is hopeful materials costs have peaked for now.
"Anything over 60 indicates an extremely high level of activity, and this shows you manufacturing is still growing at a fairly fast rate," he said, noting this is the sixth consecutive month the manufacturing index has come in above 60.
The ISM said that the April figure still means the economy is growing, but companies responding to its survey said that higher prices of certain commodities, such as aluminum and steel, were causing some difficulties. The ISM's prices index came in at 88 percent, 2 percentage points higher than in March. It was the 26th consecutive month the index has increased - and the highest the index has been since April 1979, when it was 89.2 percent.
"The list of metals up in price is quite extensive - almost every category of product has seen price movement," said Norbert J. Ore, chairman of the institute's manufacturing business survey.
Ore also noted, though, that "many respondents indicate that order backlogs are growing for the first time in several years."
Indeed, all 17 industries surveyed reported growth.
The institute's indexes tracking production and employment also moved higher, while its gauges for new orders and supplier deliveries pulled back, but remained above 50. The index tracking inventories continued to lag, coming in below 50 percent for the 51st consecutive month.
Wall Street appeared to shrug off the data - perhaps focusing instead on a Commerce Department report showing spending on construction projects around the country surged in March, registering the best month on record.