Manufacturing activity improved slightly in November from October but still indicated contraction in the sector.

The Institute for Supply Management said its index of business activity rose slightly to 49.2 in November, from 48.5 in October. A reading above 50 indicates manufacturing expansion, and a reading below 50 suggests the sector is contracting. Since September, the index has been below 50.

Meanwhile, the Production Index strengthened to 54.6 from 49.3 in October. However, the New Orders index softened to 49.9 from 50.9.

"The decline in manufacturing employment is quickening. We are seeing a slowing in the rate of price increases. Overall, there are not really any signs of potential change either upward or downward," said Norbert J. Ore, chairman of the ISM.

According to the report, eight of the 20 manufacturing industry sectors reported growth: textiles, food, instruments and photographic equipment, tobacco, rubber and plastic products, chemicals, printing and publishing, and furniture.

Separately, spending for new U.S. construction rose 0.3% in October, due to strength in single-family homebuilding.