Manufacturing shrinks in US at slower pace

NEW YORK: Manufacturing in the US probably shrank in June at the slowest pace in 10 months, another sign the worst of the recession may be over, economists said before a private report on Tuesday.

The Institute for Supply Management's factory index rose to 44.6, the highest level since August, according to the median forecast of 73 economists surveyed by Bloomberg News. Readings lower than 50 signal contraction.

Stabilization in consumer spending, the biggest part of the economy, may prompt factories to boost production in coming months. After trimming stockpiles at the fastest pace on record in the first quarter, companies continued to cut back in the last three months, meaning any pickup in demand will spark a recovery in manufacturing.