The pace of growth in US manufacturing picked up last month.
However, measures of new orders and exports eased, underscoring how the economy is recovering at a gradual clip.
The Institute for Supply Management (ISM) said its index of national factory activity rose to 53.4 from 52.4 in February.
Economists' expectations had predicted 53.0.
It was a rebound for the sector after the pace of growth unexpectedly slowed in February and there were signs of stronger hiring. Even so, the forward-looking gauge of new orders was modestly weaker in March, easing to 54.5 from 54.9.
A measure of exports also fell to 54.0 from 59.5, a potential sign of the impact of a weaker Europe.
"The economy is still locked on a very gradual healing trajectory," said Steven Ricchiuto, chief economist at Mizuho Securities in New York, of today's data.
Data from the Commerce Department showed U.S. construction spending fell 1.1% to an annual rate of $808.86 billion, the lowest level since October as investment in private and government projects fell.
