By John S. McClenahen As the National Association of Manufacturers asserts, the state of U.S. of manufacturing is better now than it was a year ago. However, a closely watched indicator shows that U.S. manufacturing grew at a slower rate in August than it had in July. The Institute for Supply Management's (ISM) PMI measure of manufacturing activity slipped to 59% in August from 62% in July as both new orders and production slowed. The PMI's new orders element fell 3.5 percentage points to 61.2% in August from 64.7% in July. The production element dropped 6.6 percentage points to 59.5% in August from 66.1% in July. "August's PMI at 59% represents the end of a period of nine consecutive months when the PMI was at 60% or higher," notes Norbert J. Ore, chair of Tempe, Ariz.-based ISM's manufacturing business survey committee and group director for strategic sourcing and procurement at Georgia-Pacific Corp. On ISM's index, a figure above 50% indicates that the manufacturing sector of the U.S. economy generally is expanding; a number below 50% suggests that manufacturing is contracting. " . . .The message is that factory growth is slowing, but not slow," emphasizes UBS Investment Research, New York. And, adds UBS, the ISM decline likely won't keep the Federal Open Market Committee from raising the target for the influential federal funds rate at its scheduled meeting on Sept. 21.