The manufacturing sector expanded in February for the seventh straight month while a measure of employment jumped to the highest level in more than five years.
The pace of manufacturing growth was slower than in the previous month, and fell short of economists' expectations.
The Institute for Supply Management, an industry trade group of purchasing executives, said Monday its manufacturing index index read 56.5 last month, slightly slower than the 58.4 reading in January. It was also slower than the 58 level expected by economists polled by Thomson Reuters.
A reading above 50 indicates expansion.
ISM said its employment measure grew for the fourth time in five months, accelerating to 56.1 in February from 53.3 in January. February's number is the highest since January 2005.
"With these levels of activity, manufacturers are seemingly willing to hire where they have orders to support higher employment," said Norbert Ore, chair of ISM's manufacturing survey committee.
A pickup in business investment in equipment and software, increases in exports and slower cutbacks of inventories is helping drive production gains.
Of the 18 industries ISM surveys, 11 reported growth, led by machinery, paper products and apparel. Five declined, led by wood products, furniture and primary metals; two were unchanged.
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