According to the Institute for Supply Management’s (ISM) index of manufacturing business conditions, manufacturing came in at 53.9, a slightly slower pace than December’s 55.2, but still above the 53.7 ISM economists had forecasted. Any reading above 50 generally indicates a growth in manufacturing, while a reading below 50 generally signals a decline in the sector.

ISM’s New Order Index declined 3.2 percentage points from December’s 62.9% to 59.7% in January. ISM’s Production Index declined 0.3 percentage point from 56.6% in December to 56.3% in January. The Employment Index is at 47.6% for January, a decrease of 0.6 percentage point when compared to December’s 48.2%.

Norbert J. Ore, chair of the institute’s Manufacturing Business Survey Committee, says that the growth is “providing cause for optimism for an improving economy in the first quarter.”