WASHINGTON• • Factory activity in the United States slowed sharply last month amid ongoing supply shortages and bottlenecks, according to an industry survey released on Monday.

While manufacturing continues to grow, the reopening of the economy has hit speed bumps that have posed challenges to the industry, according to the Institute for Supply Management's (ISM) monthly report. These include rising material prices and difficulties in hiring workers.

Its manufacturing index fell 1.1 points to 59.5, the lowest level since January, although that remains above the 50-point threshold indicating growth.

Companies "continue to struggle to respond to strong demand due to difficulties in hiring and retaining" workers, said ISM survey chief Timothy Fiore.

He noted that "all segments of the manufacturing economy are impacted by near record-long raw-material lead times, continued shortages of critical basic materials, rising commodities prices and difficulties in transporting products".

The indexes for new orders, production and deliveries all fell, while the order backlog measure increased slightly, the report said.

However, the employment index jumped 3 points and prices fell 6.4 points, indicating a slight improvement in the factors holding back manufacturing.

"Labour challenges across the entire value chain and transportation inefficiencies are the major obstacles to increasing growth," said Mr Fiore.

Mr Oren Klachkin of Oxford Economics said the survey indicates that growth in the sector is likely to have peaked.

"The manufacturing outlook remains quite bright, with hearty goods demand, rising business investment and firming global activity set to keep factories churning at a solid pace," he said.

"But manufacturers will have a tough time meeting robust demand."

AGENCE FRANCE-PRESSE