The pace of growth in the manufacturing sector picked up in January to its highest level since June as new orders improved, according to an industry report released on Wednesday.

The Institute for Supply Management (ISM) said its index of national factory activity rose to 54.1 from a revised 53.1 the month before, falling shy of expectations for 54.5.

A reading above 50 indicates expansion in the manufacturing sector.

New orders gained to 57.6 from 54.8, while the employment index slipped to 54.3 from 54.8.

(Reporting By Leah Schnurr; Editing by Padraic Cassidy)