The Institute for Supply Management said Wednesday its manufacturing index rose to 56.3 in August from 55.5 in July. A reading above 50 indicates growth. The manufacturing sector has expanded for 13 straight months.
Economists polled by Thomson Reuters had forecast a weaker reading of 53.0.
Rising exports overseas and demand from businesses for capital equipment and supplies have helped propel production in factories for a year.
Momentum had slowed earlier this summer from a reading of 60.4 in April, which was a 6-year high. But employers are still eager to add jobs. The ISM survey in August showed manufacturing managers' desire to hire increased to 60.4, the strongest level since December 1983.
Wednesday's report suggests that moderate growth will likely continue, said Norbert Ore, the chair of the survey.
However, a measure of new orders, which are a gauge of future business, dipped to the lowest level since June 2009 after surging earlier this year. Economists said that suggests growth in the manufacturing sector will slow in coming months.
ISM surveys production managers at about 350 companies around the country, including makers of products used by both businesses and consumers such as machinery, food and tobacco, electrical equipment and furniture.