The U.S. manufacturing sector expanded in March at its fastest pace in more than five years, marking the eighth straight month of growth, according to an industry report released on Thursday.

The Institute for Supply Management said its index of national factory activity rose to 59.6 from 56.5 in February. That was the highest reading since July 2004. The median forecast of 79 economists surveyed by Reuters was for a reading of 57.0.

A reading above 50 indicates expansion in the sector.

The index's employment index slipped slightly to 55.1 in March from 56.1 the prior month, but prices paid jumped to 75.0 from 67.0 in February.

(Reporting by Steven C. Johnson; Editing by James Dalgleish)