The U.S. manufacturing sector expanded in March at its strongest pace in 5 1/2 years, a private trade group said Thursday, as industrial companies continue to lead the recovery from the recession.

The Institute for Supply Management, a trade group of purchasing executives, said its gauge of industrial companies rose to 59.6 in March from 56.5 in February. It is the eighth straight month of expansion and the fastest growth since July 2004, when the index was 59.9.

Economists polled by Thomson Reuters had expected the measure to read 57.

A level above 50 indicates growth.

Factories are boosting production for exports and their customers are slowing the drawdown of their inventories, helping power the economic recovery worldwide.

Manufacturing surveys Thursday in China, Britain and the 16 countries using the euro all showed factory activity surging.

Seventeen of the 18 industries that the ISM surveys reported growth last month, led by the apparel sector. Only makers of plastics and rubber products reported contraction.

New orders, a signal of future production, and existing production also grew faster in March. Manufacturers said their inventories grew after 46 straight months of contraction.

Letting inventories rise is a signal that companies expect factory activity and orders to increase.

The prices paid by manufacturers also grew at the fastest pace since August 2008 as energy costs have risen over the past two months.