AP Business WriterNEW YORK (AP) -- Manufacturing activity shrank for the 17th consecutive month in December but beat expectations, raising the prospect of a slow rebound, an industry group reported Wednesday.
The Tempe, Ariz.-based Institute of Supply Management said its index of business activity rose to 48.2 in December from 44.5 in November. Analysts had been expecting a reading of 46.
An index above 50 signifies growth in manufacturing, while a figure below 50 shows contraction.
"While the manufacturing sector continues to decline, the rate of decline has slowed very quickly, giving some hope that recovery may come faster than is generally found in a major downturn," said Norbert J. Ore, who oversees the monthly survey for the ISM, formerly known as the National Association of Purchasing Management.
The measure is closely tracked because it offers an early reading on the health of the manufacturing sector. Its index is based on a survey of purchasing executives who buy the raw materials for manufacturing at more than 350 companies.
Ore said he was encouraged that two industries, electronic components, equipment and instruments and photographic equipment saw growth in new orders in December.
The improvement, he added, is one of the first indications that recovery in the technology sector may have begun.