The Institute for Supply Management released its Chicago purchasing managers' index on Wednesday. The Chicago purchasing managers' index declined to 48.7 in September from 54.4 in August, missing expectations for a decrease to 53.0.

A reading above the 50 mark indicates expansion, a reading below 50 indicates contraction.

The decline was driven by drops in production and in new orders. The production index plunged to 43.6 in September from 59.0 in August, the lowest level since July 2009, while the new orders index was down to 49.5 from 56.7.

The employment index rose to 52.3 in September from 49.1 in August.

"While activity between Q2 and Q3 actually picked up, the scale of the downturn in September following the recent global financial fallout is concerning. Disinflationary pressures intensified and output was down very sharply. We await the October data to better judge whether this was a knee jerk reaction and there is a bounceback, or whether it represents a more fundamental slowdown," Chief Economist of MNI Indicators Philip Uglow said.