Manufacturing sector expands at a slower pace in March

Figures above 50 reflect expansion.

"Policies from Washington are clearly not helping, with some manufacturers noting budget sequestration or various regulatory actions as either a drag on their business or the source of persistent uncertainties," Moutray wrote in a blog post on Monday.

"On the positive side there were also some encouraging signs in these data, with the pace of hiring picking up and notable improvements in manufacturing goods exports. We hope this translates into the creation of more jobs in the March jobs report due out on Friday."

Economists expect the economy to slow down through the summer following the March 1 implementation of $85 billion in across-the-board spending cuts. There is an expectation that growth could pick up again in the fall. 

A separate report showed construction spending increased 1.2 percent in February, with homebuilding provided a boost to the sector.

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Residential construction rose 2.2 percent in February, the best performance since November 2008. 

The housing market's prolonged recovery is picking up pace and is expected to fuel the nation's economic growth.

Overall, ISM’s measurement of new orders fell to 51.4 percent in March, a decrease of 6.4 percentage points from February's 57.8.

Production dropped to 52.2 percent in March from 57.6 in February.

Exports rose to 56 percent in March, moving at a faster clip than the 53.5 reported in February, which was the fourth consecutive month of growth after six months of contraction.

Price growth fell sharply to 54.5 percent in March, a decrease of 7 percentage points compared to the February reading of 61.5 percent. 

This post was updated at 12:15 p.m.