WASHINGTON, D.C. — A persistent slump in US manufacturing extended into a seventh straight month in October, according to survey data published on Friday, with weak demand deepening the contraction.

"US manufacturing activity contracted again in October, and at a faster rate compared to last month," Timothy Fiore, survey chief for the Institute for Supply Management (ISM), said in a statement.

Fiore attributed the subdued demand to companies being unwilling to invest due to concerns that tax-and-spend policies proposed by both contenders in Tuesday's US presidential election could keep interest rates higher for longer.

The ISM's manufacturing index fell to 46.5 percent last month, down 0.7 percentage point from September, and well below the 50-point mark separating expansion from contraction.

The figure was below market expectations of 47.6 percent, according to Briefing.com.

In a sign of modest improvement, the contraction in the indices for both new orders and employment slowed last month.

But the good news was offset by a faster slowdown in production and inventories, according to the ISM survey.

Five industries, including apparel, and petroleum and coal products, reported growth last month, while 11 reported a contraction, including transportation equipment, chemical products and electrical equipment.

The Federal Reserve (Fed) recently started cutting interest rates and has indicated it expects to continue doing so.

Futures traders are confident that the Fed will move ahead with a 25-basis-point cut next week, according to CME Group data.

"The October ISM broadly showed more of the same for manufacturing," economists at Wells Fargo wrote in an investor note published Friday. "Yet we are optimistic [about] a coming recovery."

They said that businesses' need to replace old equipment, along with greater "policy clarity" after the US elections, and additional rate cuts expected next year, should see "capital spending budgets favor new investment in the coming months." afp