A report from the Institute for Supply Management (ISM) showed on Wednesday the U.S. manufacturing sector expanded in April at a slower pace than in March. 

The ISM's index of manufacturing activity came in at 52.8 percent last month, down 2.5 percentage points from the March reading of 55.3 percent, missing economists' forecast for a 55.0 percent reading.

The latest reading pointed to the weakest growth in manufacturing activity since October 2016.

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

The monthly drop by the headline index was primarily attributable to slower increases in new orders (-5.7 percentage points m-o-m to 51.7 percent in April), production (-3.5 percentage points m-o-m to 52.3 percent) and employment (-5.1 percentage points m-o-m to 52.4 percent) indicators. Meanwhile, supplier deliveries index (+0.4 percentage point m-o-m to 54.6 percent) and the inventories index (-1.1 percentage points to 52.9 percent) recorded increases.

Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee said, “The past relationship between the PMI and the overall indicates that the PMI for April (52.8 percent) corresponds to a 2.9-percent increase in real gross domestic product (GDP) on an annualized basis.”