Economic activity in the manufacturing sector expanded in February at a slower pace than in January, according to the Institute for Supply Management’s purchasing managers index for US manufacturing. February’s index reading registered 54.2, down from January’s reading of 56.6 and its lowest level in more than two years.

Any reading above 50% generally indicates improving conditions.

The employment portion of the index fell to a reading of 52.3 in February from 55.5 in January, also indicating expansion but at the lowest level since November 2016, when the index registered 51.6%.

“Comments from the panel reflect continued expanding business strength, supported by notable demand and output, although both were softer than the prior month,” said Timothy Fiore, chair of the Institute for Supply Management’s Manufacturing Business Survey committee.

MarketWatch’s survey of economists had forecast the index to total 55.5%. MarketWatch reported the economy slowed toward the end of 2018 and while it may have slowed further early in the new year, the US is still growing at a steady pace and the odds of recession are low.