NEW YORK (CNN/Money) - U.S. manufacturing activity accelerated in March, the nation's purchasing managers said Thursday, beating Wall Street forecasts for a slight decline.
The Institute for Supply Management (ISM) said its index of manufacturing activity rose to 62.5 last month from 61.4 in February. Economists, on average, expected an ISM index of 59.5, according to Briefing.com.
A reading above 50 indicates expansion in manufacturing, and the index has been at or above that level since May 2003. The index has been above 60, a very strong number, since November.
"The manufacturing sector had another good month in March as the PMI has now been above the 60 percent mark for five consecutive months," Norbert Ore, chairman of the ISM's survey committee, said in a release. "Both new orders and production remain strong and have significant momentum going into the second quarter."
The report helped lift U.S. stock prices in early trading, while Treasury bond prices fell.
The ISM's new orders component slipped a bit in March, to 65.7 from 66.4, but that was about the only area of weakness.
The production index rose to 65.5 from 63.9, the supplier delivery index jumped to 67.9 from 62.1 -- indicating slower delivery times, a sign of increased activity -- and the backlog of orders index rose to 63.5 from 62.
The employment index edged up to 57 from 56.3 in February, a hopeful sign for future manufacturing employment.
The Labor Department is due to release its figures for March unemployment and payroll growth on Friday. Economists, on average, expect unemployment to hold steady at 5.6 percent and think 123,000 new jobs were added in the month, according to Briefing.com.
Though the gain in the ISM employment index could cause some economists and traders to raise their expectations for manufacturing payrolls in March, the index contradicts reports from closely watched manufacturing regions, including Chicago, the mid-Atlantic states and New York, which showed a slight decline in employment in March, along with a drop in overall factory activity.