Markit Economics' purchasing manager's index rose from a 38-month low to 52.4, and missed economists' forecasts for 52.7.
The release showed that business conditions in the sector improved. But the pace of job creation slowed to a rate not seen through all of 2015, indicating that employers are still worried about the future.
Markit chief economist Chris Williamson wrote in the release: "Despite picking up slightly, the January PMI reading is one of the worst seen over the past two years, highlighting the ongoing plight of the manufacturing sector. One bright light appeared, in that order book growth picked up, led by an upturn in domestic demand."
ISM Manufacturing
The Institute of Supply Management's PMI shrank for a fourth straight month and came in at 48.2, versus 48.5 expected.
Any headline reading below 50 is in contractionary territory, and prints under 45 are historically associated with recessions.
There was a notable increase in the new orders index by 2.7 percentage points to 51.5 from 48.8. Like Markit's reading, ISM's employment gauge fell, to 45.9 from 48.
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