NEW YORK (CNN/Money) - The nation's manufacturing sector grew at a faster pace in July, according to a survey of industry executives released Monday that contained lots of good news for Wall Street expectations.

The Institute of Supply Management's survey of executives at goods-producing companies came in at 56.6, the best reading of 2005 and up from the 53.8 reading in June. The closely watched survey, one of the first economic readings for July, had been forecast to rise to 54.5 in July.

Any reading above 50 constitutes growth in the sector, so Monday's survey means that manufacturing has grown for 26 straight months, the longest expansion in the sector in more than 16 years, since nearly three years of uninterrupted growth ended in April 1989.

The survey's subindexes also had good news for economists and investors. The employment index rose above that important 50 mark to 53.2 after two months below 50. The manufacturing sector has seen a net decline in employment in nine of the last 10 months through June, according to the government employment report.

The July employment report is due out Friday.

And companies finally saw some price relief from their suppliers, as the prices index fell below 50 after posting 40 straight months of increases, coming in at 48.5. The survey showed 27 percent of executives now paying lower prices, more than the 24 percent paying higher prices during the month.

This marked the second straight month that the ISM index showed stronger growth in the sector. Before that, the index had fallen for 11 straight months to a two-year low, raising fears at that time that the expansion in the sector was running out of steam.

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