Manufacturing activity in Australia expended slightly in January, a private survey released on Wednesday by the Australian Industry Group (Ai Group) found.

The Australian Industry Group/PriceWaterhouseCoopers Australian Performance of Manufacturing Index (PMI) rose 1.4 points to 51.6 in January.

Readings above 50 indicate an expansion in activity.

Ai Group Chief Executive Heather Ridout said the result was encouraging but the pace of growth in manufacturing sector was small.

"Encouragingly, manufacturing held on to positive territory in January to register the second consecutive month of growth, albeit by a slim margin,"Ridout said in a statement accompanying the survey report.

"Respondents cited ongoing global economic uncertainty and strong overseas competition as factors inhibiting growth in January," she said.

Across the sub-sectors, food and beverages registered the strongest performance, the survey found.

Textiles recorded the biggest decline in activity while the sub- sectors linked to construction also performed poorly.

Six of the 12 manufacturing sub-sectors posted declines in activity in January.