The Institute for Supply Management, a group of purchasing managers, said Tuesday that its manufacturing index increased to 53.7 from 53.2 in February. Any reading above 50 indicates expansion.
The increase suggests that manufacturing is growing at a steady but modest pace after cold winter weather caused a sharp slowdown in the first two months of the year.
Even so, factories are hiring at the slowest pace in nine months, the survey found. The government will release its official jobs report for March on Friday.
Manufacturing activity had plunged in January as harsh snow storms shut down factories and disrupted supply shipments. It rebounded slightly in February as orders and stockpiles grew. But a measure of production plummeted in February to a five-year low. That measure recovered all its losses in March.
The overall index remains below the level that prevailed in the second half of last year, when it regularly topped 56.
"There's still some catching up to do," said Jennifer Lee, an economist at BMO Capital Markets. "But at least it is heading in the right direction."
The growth was broad-based and many comments from manufacturers in the survey were positive. Fourteen of the 18 industries tracked by the index reported growth.
Other reports on manufacturing in recent weeks have been mixed.
Factory production jumped in February, according to a Federal Reserve report two weeks ago, as manufacturers cranked out more cars, home electronics and chemicals. Output grew by the most in six months. Still, the rebound came after a sharp fall in January.
Meanwhile, orders received by U.S. factories for durable goods were disappointing in February, the government said in a separate report. Orders rose 2.2 per cent, but mostly because of greater demand for commercial aircraft, a volatile category. Excluding aircraft, autos and other transportation goods, orders rose just 0.2 per cent.
And a key category that reflects business investment fell a steep 1.3 per cent, the second setback in three months.
Last year, U.S. factories were cranking out appliances, autos and other goods at a healthy pace until harsh winter weather descended. The ISM's index rose for six straight months until dipping slightly in December. That was followed by January's sharp fall.