US manufacturing was stronger than expected in April, growing at the fastest pace in almost a year.
The Institute for Supply Management (ISM) said its index of manufacturing activity rose to 54.8 last month from 53.4 in March. A figure above 50 indicates expansion.
The ISM's measure of employment in the sector also rose to a nine-month high.
That will be seen as an encouraging sign ahead of Friday's monthly jobs report from the Labor Department.
The data buoyed US stock markets, with the Dow Jones turning positive and rising 0.6%, and the Nasdaq rising 1%.
It comes after several reports in recent weeks suggested the manufacturing sector and the overall economy could be slowing.
"The view on the economy has swung from optimism to pessimism of late and this could bring us back to the middle," said Nick Bennenbroek at Wells Fargo.
"ISM suggests there's no real reason to get too concerned about the path of the US economy at this point."
A separate report from the Commerce Department showed that construction spending in the US barely changed in March, edging up just 0.1% to an annual rate of $808.07bn.
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