The US manufacturing sector contracted in January, according to the Institute for Supply Management’s purchasing managers index for US manufacturing. January’s index reading was 48.2, up from December’s reading of 48.0. However, readings below 50.0, generally, indicate contracting.

January’s report on manufacturing includes the ISM’s annual adjustment to seasonal factors used to calculate the indexes.

Bloomberg reports January’s reading fell below the median forecast of 48.4 in its survey of 79 economists. “This may be signaling the start of some stabilization in manufacturing activity and U.S. economic activity,” Millan Mulraine, deputy head of US research and strategy at TD Securities USA LLC in New York, told Bloomberg. “It’s good enough to know things haven’t gotten worse. The rise in new orders is encouraging.”

The employment portion of the index fell to a reading of 45.9 in January from 48.0 in December.