The Chicago Business Barometer, also known as the Chicago PMI, inched down to 44 in October from 44.1 in the prior month.
Economists polled by the Wall Street Journal forecast a 45.3 reading.
The index has been in contractionary territory since August 2022.
Economists said that the auto strike may have held the index down.
New orders rose after a sharp fall in September. Production slipped 4.6 points to 46.5.
Employment moved into expansionary territory for the first time since April.
The index is produced by the ISM-Chicago with MNI. It is released to subscribers three minutes before its release to the public at 9:45 am Eastern. It is the last of the regional manufacturing indices before the national ISM data for October is released on Wednesday.
So far, the regional Fed manufacturing surveys for October suggest modest improvement.
Economists expect the IMF factory index to rise slightly to 49.2% in October. This would be the 12th consecutive month in contraction territory.
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