The pace of business activity in the U.S. Midwest fell more than expected in March to its lowest since August, resuming its recent trend of slower regional growth, a report showed on Monday.
The Institute for Supply Management-Chicago business barometer was 55.9, down from 59.8 in February. Economists' median forecast in a Reuters poll was 59.0.
While this regional business gauge fell, analysts said the domestic manufacturing sector remained on a moderate growth path despite rough winter weather and hints of softening overseas demand.
"Manufacturing is growing, not booming," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, N.Y.
The Chicago PMI figure is one of the regional readings analysts use to project the national factory reading from the Institute for Supply Management.
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The business group will release its March manufacturing activity report on Tuesday at 10 a.m. (1400 GMT). Economists polled by Reuters expected the March figure to come in at 54.0, up slightly from 53.2 in February.