Economic activity in the U.S. manufacturing sector slowed in January, but the rate of decline was not as fast as in December, the Institute for Supply Management reported today. The institute's key purchasing managers' index for manufacturing had a reading of 35.6 in January, up from 32.4 in December.

January's reading was still the second-lowest in the last 12 months. And only readings of more than 50 indicate expansion.

Data for the report comes from purchasing and supply executives nationwide. In January, the respondents indicated it will take a recovery in automobiles and housing for the manufacturing sector to again prosper, said Norbert Ore, chair of the ISM's manufacturing business survey committee.

January's report reflects includes U.S. Department of Commerce updates to factors used in calculating the index.