US Manufacturing Cools

Less growth than forecast due to budget cuts

Manufacturing grew less than forecast in March as orders and production cooled, highlighting the risk of a U.S. economic slowdown this quarter as federal budget cuts take effect.

The Institute for Supply Management's factory index fell to 51.3 from an almost two-year high of 54.2 in February, the Tempe, Arizona-based group's figures showed today. A reading of 50 is the dividing line between growth and contraction. Another report showed construction spending climbed in February, led by the strongest home-building outlays in more than four years.