MANUFACTURING activity in the US grew in June at its slowest pace in eight months as overseas demand dried up and firms took on the fewest new workers in over three years, a survey showed yesterday.

Financial data firm Markit said its final Manufacturing Purchasing Managers Index stood at 51.9 in June, below 52.3 in May and a preliminary June estimate of 52.2. A reading above 50 indicates expansion.

The output index rose to 53.5 from 52.7 but domestic orders were little changed and orders from abroad fell at their fastest rate since the height of the financial crisis in mid-2009.

The employment sub-index fell to 49.9, the lowest since January 2010 and "consistent with roughly 30,000 jobs being lost per month in the manufacturing sector," according to Markit chief economist Chris Williamson. It stood at 52.6 in May.

"Firms are responding to the increasingly worrying order book trend by pulling back on recruitment," Williamson said.

That could complicate things for the Federal Reserve, which said it could begin scaling back its massive stimulus program later this year provided the economy does not lose momentum.

Economists polled by Reuters expect growth in the broader economy to have slowed to 1.7 percent in the second quarter from 1.8 percent in the first, though most say it should pick up steam in the second half.