According to the Institute for Supply Management’s monthly report on business, the ISM index gained to 44.8 in June from 42.8 in May.
Economists polled by Thomson Reuters predicted the index would rise to 44.5.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion. A reading of 50 shows the sector was unchanged in the month.
The closely watched prices paid index rose to 50.0 from 43.5. The employment index was at 40.7, up from 34.3 the prior month.
The production index increased to 52.5 from 46.0, the new orders index fell to 49.2 from 51.1, the supplier deliveries index climbed to 50.6 from 49.8, the export orders index increased to 49.5 from 48.0, and the imports index rose to 46.0 from 42.5.