U.S. factory activity expands in May: Markit

The U.S. manufacturing sector expanded at a stronger-than-expected rate in May, while factory output growth hit its fastest pace since February 2011, an industry report showed on Thursday.

Financial data firm Markit said its preliminary or "flash" U.S. Manufacturing Purchasing Mangers Index rose to 56.2 in May from 55.4 in April. Economists polled by Reuters expected a reading of 55.5.

Readings above 50 indicate expansion in the sector.

"The U.S. manufacturing sector continued to gain strength heading into mid-year as supportive demand conditions led to the sharpest month-on-month increase in production for over three years," said Paul Smith, senior economist at Markit.

"This provides further confirmation that industry will aid a rebound in U.S. GDP in the second quarter, and other indicators from the survey suggest that the sector has plenty of momentum heading into the summer and beyond."

The output subindex also rose in May to 59.6 from 58.2 in April, and was the highest since February, 2011.

The employment subindex fell, however, to 53.5 from 53.7 in April, and was the lowest since January.

Markit's "flash" reading is based on replies from about 85 percent of the U.S. manufacturers surveyed.

(Reporting by Angela Moon, Editing by Chizu Nomiyama)