Manufacturing activity in the U.S. continued to expand in the month of November, according to a report released by the Institute for Supply Management on Tuesday, although the pace of growth slowed by more than expected.

The ISM said its manufacturing PMI dropped to 57.5 in November from 59.3 in October, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to dip to 58.0.

“Survey Committee members reported that their companies and suppliers continue to operate in reconfigured factories,” said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.

“But absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers are causing strains that will likely limit future manufacturing growth potential,” he added. “Panel sentiment, however, is optimistic.”

The bigger than expected decrease by the headline index came as the new orders index slid to 65.1 in November from 67.9 in October and the production index fell to 60.8 from 63.0.

The employment index also tumbled to 48.4 in November from 53.2 in October, indicating a contraction in employment in the manufacturing sector following one month of growth.

On the inflation front, the report said the prices index edged down to 65.4 in November from 65.5 in October but still pointed to the sixth consecutive month of growth in raw materials.

The ISM is scheduled to release a separate report on activity in the service sector on Thursday. The services PMI is expected to slip to 56.0 in November from 56.6 in October.

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