WASHINGTON: US factory activity grew at its slowest pace in nearly two years in April amid a rise in workers quitting their jobs, and manufacturers are becoming more anxious about supply over the summer because of new COVID-19 lockdowns in China.

The survey from the Institute for Supply Management (ISM) on Monday described manufacturing as remaining “in a demand-driven, supply chain-constrained environment.”

ISM Manufacturing Business Survey Committee chair Timothy Fiore said new coronavirus outbreaks overseas were “creating a near-term headwind for the US manufacturing community,” noting that some manufacturers worried “about their Asian partners’ ability to deliver reliably in the summer months.”

The ISM’s index of national factory activity fell to a reading of 55.4 last month, the lowest since July 2020, from 57.1 in March. A reading above 50 indicates expansion in manufacturing, which accounts for 12% of the US economy.

Economists polled by Reuters had forecast the index rising to 57.6. The second straight monthly decline in the index also reflects spending rotating back to services like travel, dining out and recreation. Government data on Friday showed consumer spending on services increasing by the most in eight months in March, while outlays on long-lasting manufactured goods dropped for a second consecutive month.