The U.S. manufacturing sector continued to contract in June but at a slower rate than in May, according to the Institute for Supply Management's key purchasing managers' index for manufacturing released today.

The index rose to a level of 44.8 in June from 42.8 in May. However, only readings of more than 50 indicate expansion.

Norbert Ore, chair of the institute's manufacturing business survey committee, said trends in manufacturing are encouraging.

"Overall, a slow recovery for manufacturing is forming based on the current trends in [institute] data," Ore said.