CHICAGO, March 29 (Xinhua) -- The Chicago Purchasing Managers Index (PMI), an indicator of the larger U.S. economy, fell 4.5 points to 57.4 in March, the lowest level in a year, the Institute for Supply Management (ISM) Chicago Branch said on Thursday.

Business activity continued to expand in March, but the pace of expansion moderated for a third straight month, it said in a report.

Three of the five Chicago PMI components receded in the month, with only employment and supplier deliveries expanding. Compared to March last year, the index was still up 0.5 percent.

"Troubles higher up in firms' supply chains are restraining their productive capacity and higher prices are being passed on to consumers. On a more positive note, firms remain keen to expand their workforce," said Jamie Satchi, economist at MNI Indicators.

Chicago PMI is a composite diffusion indicator made up of production, new orders, order backlogs, employment, and supplier deliveries compiled through surveys. Values above 50.0 indicate expanding manufacturing activity.