The Institute for Supply Management (ISM) said its index of national factory activity fell to 55.5 from 58.7 the month before. The reading was shy of expectations of 57.6, according to a Reuters poll of economists.

A reading above 50 indicates expansion in the manufacturing sector.

The dropoff comes in tandem with a similar slip in Markit’s flash purchasing managers’ index, and indicates that activity in the factory sector has taken a hit on worries about global demand and a drop in oil prices. The decline dropped the ISM index to its lowest level since June.

The new orders index fell to 57.3 from 66. The prices paid gauge was down dramatically to a reading of 38.5 from 44.5, compared with expectations for a reading of 43.

Employment rebounded modestly, however, rising to 56.8 from 54.9, and ahead of expectations for a 54.7 reading. December’s figure marks the 18th consecutive month of expansion in manufacturing employment sentiment.

A separate report issued Friday morning showed U.S. construction spending unexpectedly fell in November, held back by a drop in government outlays and by less money spent by businesses on projects other than homes.

Construction spending fell 0.3 percent, the first decline since June, to an annual rate of $975 billion, the Commerce Department said on Friday.

October’s construction outlays were revised up to show a 1.2 percent gain instead of the previously reported 1.1 percent increase. Economists polled by Reuters had forecast construction spending rising 0.3 percent in November.

While the readings could point to softer investment by businesses and governments, spending on home construction looked more robust. Outlays on private residential construction rose 0.9 percent in November.