Norbert J. Ore, chair of the ISM manufacturing business survey committee, said manufacturing continues to contract at a slower rate, but the trends in the indexes are encouraging as seven of 18 industries reported growth in June.
"Aggressive inventory reduction continues and indications are that the de-stocking cycle is at or near the end in most industries," Ore said. "Overall, a slow recovery for manufacturing is forming based on the current trends in the ISM data."
In the construction equipment and farm equipment manufacturing sectors, signs of a recovery have yet to fully materialize.
The Commerce Department said Wednesday that spending on construction declined in May, falling 0.9 percent to $964 billion at a seasonally adjusted annual rate, including a 3.5 percent decline in residential construction.
Economists said the job market continues to be weak. A national report on private-sector employment showed a loss of 470,000 jobs last month, a higher number than expected.
The world's largest maker of tractors and agricultural equipment announced 800 layoffs.
