TEMPE, Ariz. ( TheStreet) -- Business activity in the manufacturing realm showed continued expansion in February, though the pace of growth trailed Street expectations.

A manufacturing activity index from the Institute for Supply Management fell to 56.5% last month. Typically, a reading above 50% denotes industry growth while a reading below suggests contraction. The mark showed sector growth for the seventh straight month, according to the group's report released Monday.

But the February expansion was slower than both analysts' expectations and showings in January. Consensus forecasts called for a reading of 58% last month after hitting 58.4% in January. Still, the February mark was better than December's 54.9% reading and continues to echo other data points showing recovery in the factory ranks.

The ISM report is stitched together using survey data from executives throughout the U.S.

Several specific assessments within the industry revealed some growth, albeit at a slower pace compared to January figures. A subindex on new orders declined to 59.5% in February after registering 65.9% in the month prior, while production slipped to 58.4% after reading 66.2%.

But a reading on manufacturing employment rose to its highest level since January 2005, adding 2.8 percentage points to register 56.1% in February. The ISM said 10 of 18 manufacturing industries tracked by the group reported employment growth in February.

"This is the third consecutive month of growth in the Employment Index," said Norbert J. Ore, chair of the ISM, in a release. "With these levels of activity, manufacturers are seemingly willing to hire where they have orders to support higher employment."

The labor market news comes ahead of Friday's highly anticipated jobs report from the Labor Department.

The Dow Jones Industrial Average was adding 79 points, or 0.8%, to 10,404. By midday, major manufacturers like Caterpillar ( CAT), Intel ( INTC), Pfizer ( PFE) and Boeing ( BA) were leading the blue-chip average higher.

--Written by Sung Moss in New York

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