The Chicago Business Barometer, also known as the Chicago PMI, dropped sharply to 45.7 in September from 52.2 in the prior month.
Economists polled by the Wall Street Journal forecast a 51.8 reading.
Readings below 50 indicate contracting conditions.
The index is produced by the ISM-Chicago with MNI. It is released to subscribers three minutes before its release to the public at 9:45 am Eastern.
The Chicago PMI is the last of the regional manufacturing indices before the national ISM data for September is released on Monday.
Stocks were mixed on Friday with the Dow Jones Industrial Average
down slightly with the S&P 500 index
inched higher. The yield on the 10-year Treasury note
was down to 3.72%.