U.S. manufacturing growth accelerated for a third straight month in April, an industry report showed on Thursday, boosted by a pickup in employment growth.
The Institute for Supply Management (ISM) said its index of national factory activity rose to 54.9 in April, up from 53.7 in March. It was the best reading since December.
The report beat analyst expectations for a reading of 54.3, though the index remains below November's recent peak of 57, which was the highest since April 2011. Readings above 50 indicate expansion in the sector.
Gains in the month came alongside a rebound in the employment subindex, which jumped more than expected to 54.7 from March's 51.1, which had been the weakest since June 2013. Analysts were looking for a read of 52.8.
The forward-looking new orders index was unchanged at 55.1 while the production subindex slowed slightly, dropping to 55.7 in April from 55.9.
A separate report showed U.S. construction spending rose less than expected in March, as outlays on public projects fell for a fifth consecutive month.
Construction spending increased 0.2 percent to an annual rate of $942.5 billion, the Commerce Department said. Construction spending in February was revised to show a 0.2 percent drop instead of the previously reported 0.1 percent gain.
Economists polled by Reuters had forecast a 0.5 percent increase in construction outlays in March.
Gains in construction spending were tempered by a 0.6 percent fall in outlays on public construction. Public construction spending hit its lowest level since November 2006.
That reflected a 2.4 percent decline in spending by the federal government. State and local government spending fell 0.4 percent, dropping for a fifth straight month.
In contrast, spending on private construction projects rose 0.5 percent in March to the highest level since December 2008.
Private residential construction hit its highest level since May 2008, reflecting gains in both single and multi-family home building. The gains also reflected the impact of remodeling projects.
The housing market recovery has stalled since interest rates started rising last year and investment in home building contracted in the first three months of this year for a second straight quarter.
Spending on nonresidential construction projects, which include factories and office building, rose 0.2 percent in March.