Economist expected the U.S. manufacturing index to hit 57 in March, according to a Thomson Reuters consensus estimate.
A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
Of the 18 manufacturing industries included in the survey, 17 reported growth in March, such as electrical equipment, appliances and components, and printing and related support activities, the group said.
The new orders index, which includes companies in apparel, chemical products, paper products and more, registered 64.5 percent, a decrease of 0.6 percentage point from the February reading of 65.1 percent.
Elsewhere, the Commerce Department announced February U.S. construction spending increased 0.8 percentage points, its highest level since April 2006, after falling 1 percent in January. Economists expected spending to grow by 1.1 percent for February, according to Reuters estimates.
U.S. developers ramped up construction spending in February to the largest amount in nearly 11 years, led by more building of homes, highways and schools.
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