The U.S. manufacturing index inched slightly higher, hitting 54.9, in May, the Institute for Supply Management, or ISM, announced on Thursday.
Economists had expected the closely watched index to slip to 54.5, according to a Thomson Reuters consensus estimate. ISM's index last stood at 54.8 in April.
This implies the overall manufacturing economy grew for the 96th consecutive month.
"Comments from the panel generally reflect stable to growing business conditions, with new orders, employment and inventories of raw materials all growing in May compared to April," Timothy Fiore, chair of ISM's business survey committee, said in a statement.