Economic activity in the manufacturing sector expanded in April but at a slower pace than in March, according to the Institute for Supply Management’s purchasing managers index for US manufacturing. And the panel of firms taking part in the report indicated labor and skill shortages continue to restrain production and employment.

April’s index reading was 57.3, down from March’s reading of 59.3. Any reading above 50% generally indicates improving conditions.

The employment portion of the index also declined to a reading of 54.2, down from the March reading of 57.3.

“Employment expansion continues at slower rates due to companies struggling to hire skilled workers,” said Timothy Fiore, chair of the Institute for Supply Management manufacturing business survey committee. “Many respondents continue to see the labor market as a constraint to their production and their suppliers’ production.”