Published: Jan 03, 2011 5:05 PM EST
Updated: Jan 03, 2011 2:05 PM EST

WASHINGTON (AP) - Manufacturers produced more goods and booked more orders last month, leading to the fastest growth in factory activity since May.

The Institute for Supply Management said Monday that its index of manufacturing activity rose to 57 in December from 56.6 in the previous month. Any reading over 50 indicates growth. The latest is well above the recession's low of 32.5, hit in December 2008. But it's below the reading of 60.4 in April, the highest level since June 2004.

The report shows that manufacturers carried considerable momentum into the new year. Automakers, computer and electronics companies, and industrial machinery firms showed particular strength in December.

A separate report Monday showed that construction spending rose 0.4 percent in November, the third straight monthly increase. Builders began work on more homes and the government boosted its investment in construction projects to lift spending to $810.2 billion, the Commerce Department said. Still, that's only 2.3 percent above August's figure, which was the lowest level in a decade.

 Manufacturing has been one of the strongest performers since the recession ended in June 2009, and the latest report suggests that is likely to continuing in the coming months.

The new orders index rose sharply to 60.9, also the highest since May. The production index also jumped.

Consumers shed their inhibitions over the holidays and hit the malls in large numbers. That translates into more demand for the production of electronic goods, computers and appliances. Companies are also investing in new machinery and other big-ticket items.

Manufacturers are also benefiting from stronger demand overseas, particularly in large developing countries. China, Brazil and India are among those nations recovering at a faster pace than developed regions, such as Europe and Japan.

Export orders are still growing, the ISM said, but at a slower pace. ISM's index of export orders was 54.5 in December, down from 57.

 Hiring is increasing, but also at a slower pace, the group said. Its employment index fell to 55.7 from 57.5.

The ISM surveys purchasing managers at about 350 companies around the country to compile the index.

(Copyright 2011 by The Associated Press. All Rights Reserved.)