U.S. manufacturing growth accelerated for a second straight month in March, an industry report showed on Tuesday, as production recovered though employment growth slowed.

The Institute for Supply Management (ISM) said its index of national factory activity rose to 53.7 in March, which was up slightly from February's read of 53.2 but below the median forecast of 54.0 in a Reuters poll of economists.

Readings above 50 indicate expansion in the sector.

The report remains below November's recent peak reading of 57, which was the highest read since April 2011.

Gains in the month came alongside a rebound in the production subindex, which jumped to 55.9 from 48.2, ending a three-month string of slowing growth. The forward-looking new orders index rose to 55.1 from 54.5.

There were some cautionary notes, as the employment index fell from 52.3 to 51.1, the weakest read for the index since June 2013. Analysts were expecting a reading of 52.8 in the employment index.

(Reporting by Ryan Vlastelica; Editing by Chizu Nomiyama)