The U.S. non-manufacturing activity index increased in February to 57.3 percent, up from 56.8 percent in January as growth accelerated, the Institute for Supply Management (ISM) said Monday.

The reading beat expectations by analysts polled by Bloomberg, who had expected the index to dip to 56.0 percent.

It was the fourth straight month of increased growth rate and the 26th consecutive month of growth. Any reading above 50.0 indicates growth in the sectors.

The non-manufacturing business activity index rose to 62.6 percent from 59.5 percent, the 31st consecutive month of growth. Employment was down to 55.7 from 57.4. Prices rose to 68.4 percent from 63.5 percent. New orders rose to 61.2 percent from 59.4 percent.

Fourteen non-manufacturing industries reported growth in February, said Anthony Nieves, chairman of the ISM's Non-Manufacturing Business Survey Committee, in a statement. The majority of comments from the respondents reflect a growing level of optimism about business conditions and the overall economy. There is a concern about inflation, rising fuel prices and petroleum-based product costs.

Three sectors reported contraction: management of companies and support services; retail trade; and health care and social assistance.

The survey includes over 375 companies in 17 sectors including construction, retail, mining and agriculture.

Last week, the ISM said that manufacturing activity fell to 52.4 from 54.1.