Markit Economics said the manufacturing sector's Purchasing Managers Flash Index rose from 54.3 in February to 54.9 in March, which indicates the second highest level of growth in almost a year.
The flash estimate is subject to revision but the current figures, based on 85 percent of the usual monthly survey replies, indicates job creation picking up and a "strong rise" in manufacturing output, the report said.
The index for new factory orders rose from 55.4 in February to 55.9 in March. The employment index rose from 53.5 to 54.6. The index reflecting a backlog of work rose from 49.9 to 50.1.
Growth is indicated by any figure more than 50 in the report. Less than 50 indicates contraction.
"Manufacturers reported a reassuringly strong upturn in business conditions in March, adding to evidence that the U.S. has enjoyed a solid upturn in economic growth so far this year," said Markit Chief Economist Chris Williamson.
"With manufacturing a reliable bellwether of the rest of the economy, gross domestic product will have risen at a much improved rate compared with the moribund 0.1 percent annualized pace of expansion seen in the final quarter of last year."
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