August 1, 2011 10:30 AM, EDT

ISM Manufacturing Index Falls to Two-Year Low

U.S. manufacturing activity fell to a two-year low in July, but continued to show expansion for the 24th consecutive month, the Institute for Supply Management said Monday.

ISM’s monthly factory index dropped to a reading of 50.9, from a 55.3 reading in June, the group said. Figures over 50 indicate expansion.

The reading fell short of economists’ projections of a drop to 54.5, Bloomberg reported.

Ten of 18 manufacturing sectors showed expansion for the month, ISM said.

ISM’s factory index measures manufacturing components of the economy.