The pace of factory activity in the U.S. Mid-Atlantic region improved in March, though new orders slowed, a survey showed on Thursday.

The Philadelphia Federal Reserve Bank's business activity index rose for a fifth month in a row to 12.5 from 10.2 in February, topping economists' expectations of 12.0.

A gauge of new orders declined to 3.3 from 11.70, while employment gained to 6.8 from 1.10.

Any reading above zero indicates expansion in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.

It is seen as one of the first monthly indicators of the health of U.S. manufacturing leading up to the national report by the Institute for Supply Management.