The pace of growth in the manufacturing sector picked up a tad in March, while new orders dipped modestly, according to an industry report released on Monday.
Meanwhile, construction spending in February recorded its largest drop in seven months, the Commerce Department reported.
The Institute for Supply Management said its index of national factory activity rose to 53.4 from 52.4 in February, topping economists' expectations of 53.0.
A reading above 50 indicates expansion in the manufacturing sector, while a number below 50 means contraction.
New orders edged down to 54.5 from 54.9 and prices paid also eased to 61.0 from 61.5.
But construction spending dropped as investment in private and government projects fell, which could cause economists to slightly mark down their first-quarter economic growth forecasts.
Construction spending fell 1.1 percent to an annual rate of $808.86 billion, the lowest level since October.
Economists polled by Reuters had expected construction spending to rise 0.6 percent. Spending in January was revised to show a much bigger 0.8 percent fall instead of the previously reported 0.1 percent dip.
The second straight month of declines in construction outlays could prompt analysts to lower their growth estimates for the first quarter, which were raised on Friday following better-than-expected consumer spending data for February.
Overall construction spending was up 5.8 percent compared to February 2011.
Private construction spending fell 0.8 percent, declining for a second straight month. Spending on residential projects was flat. Investment in multifamily residential projects rose 2 percent, while single family outlays fell 1.5 percent.
Private nonresidential construction fell 1.6 percent, also dropping for a second month in a row.
Spending on public sector construction declined 1.7 percent in February as weak outlays on state and local government projects offset a 1.9 percent rise in investment by the federal government.
