The pace of US manufacturing expansion slowed modestly in September, with factories contending with rebounding costs and shipping delays even as demand remained strong.

Data released Thursday by the Institute for Supply Management (ISM) showed the manufacturing index slipped 0.1 point to 54.5. The gauge has stayed above the 50 threshold separating expansion from contraction for nine consecutive months, the longest such streak since 2022.

The September report showed demand remained solid. The new orders gauge rebounded, while the backlog of orders measure climbed to its highest level since February.

Production continued to expand, though at a somewhat slower pace.

Faced with rising order volumes, companies are adding workers. Manufacturing employment rose for a third straight month in September, the longest run of gains since 2022.

Manufacturers are also grappling with higher costs and supply chain bottlenecks. The raw materials price gauge rose to its highest since May, and supplier delivery times continued to lengthen, though at a slower pace.