Published: Thursday, 1 Sep 2011 | 10:16 AM ET

By: Reuters

The pace of growth in the U.S. manufacturing sector ticked down to a crawl in August but fared better than economists had forecast, an industry report showed Thursday.

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The Institute for Supply Management said its index of national factory activity edged down to 50.6 from 50.9 the month before. The reading topped expectations of 48.5, which would have signaled a contraction, according to a Reuters poll of economists.

A reading above 50 indicates expansion in the manufacturing sector. Analysts had been expecting the data to show the first contraction since July 2009, just after the recession officially ended.

New orders rose to 49.6 from 49.2, while the employment gauge dipped to 51.8 from 53.5.