A report from the Institute for Supply Management (ISM) showed on Tuesday the U.S. manufacturing sector’s activity contracted further in September.

The ISM's index of manufacturing activity came in at 47.8 percent last month, down 1.3 percentage points from the August reading of 49.1 percent, and missed economists' forecast for a 50.1 percent reading. The latest reading pointed to the sharpest contraction in the manufacturing sector since June 2009.

A reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction.

According to the report, Production Index came in at 47.3 percent, down 2.2-percentage points from August, while the Employment Index registered 46.3 percent, a fall of 1.1 percentage points from the August reading, and the Inventories Index was at 46.9 percent, down 3 percentage points from the August reading. At the same time, the New Orders Index stood at 47.3 percent, up 0.1 percentage point from the August reading and the Prices Index registered 49.7 percent, a 3.7-percentage point increase from the August reading

Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee said, “The past relationship between the PMI and the overall economy indicates that the PMI for September (47.8 percent) corresponds to a 1.5-percent increase in real gross domestic product (GDP) on an annualized basis."