Activity at US factories continued to expand in June but at a slower pace as industry struggles to meet demand amid supply issues, according to a private survey released Thursday.

Even as the US economic rebound continues, hiccups following the Covid-19 pandemic shutdowns were apparent across sectors, including getting raw materials and finding workers, according to the Institute for Supply Management's (ISM) monthly survey.

ISM's manufacturing index slipped six-tenths to 60.6 percent, the lowest since January but still reflecting strong growth. Anything above the 50-percent threshold indicates growth.

New orders also fell but production jumped 2.3 points to 60.8 percent, the survey showed.

However, the employment index fell to 49.9 percent, pointing to a slowdown in hiring after six straight months of increases.

Difficulty finding supplies including lumber for furniture could hinder US manufacturers as they struggle to keep up with rising demand, according to an industry suvery
Difficulty finding supplies including lumber for furniture could hinder US manufacturers as they struggle to keep up with rising demand, according to an industry suvery GETTY IMAGES NORTH AMERICA / SCOTT OLSON

Respondents "reported that their companies and suppliers continue to struggle to meet increasing levels of demand," ISM survey chief Timothy Fiore said, noting long lead times, rising prices and some "wide-scale shortages of critical basic materials."

In addition, he warned that "worker absenteeism, short-term shutdowns due to parts shortages, and difficulties in filling open positions continue to be issues that limit manufacturing-growth potential."

But the mood among executives was upbeat as 17 of the 18 sectors surveyed were growing and none declined.

"Other than material availability/volatility and rising prices, the outlook for our company is good. We can't keep up with the increase in orders," one furniture industry executive said.

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