The pace of growth in the U.S. manufacturing sector picked up in January to its highest level in nine months as new orders and employment improved, according to an industry report released on Friday.

The Institute for Supply Management (ISM) said its index of national factory activity rose to 53.1 from 50.2 in December, beating economists' expectations of 50.6.

A reading above 50 indicates expansion in the manufacturing sector.

It was the highest level since April of last year. A source of strength for the economy in the early years of the recovery, the manufacturing sector lost some steam in the second half of last year and contracted in November in the wake of superstorm Sandy.

The new orders index expanded to 53.3 from 49.7, while the employment gauge gained to 54 from 51.9.