Orders for long-lasting durable goods surged again in March, as U.S. factories sought to keep up with unexpectedly strong demand for a broad array of products, a Commerce Department (search) report on Friday showed.

The department said orders for big-ticket items meant to last at least three years jumped 3.4 percent, well above the 0.8 percent gain that Wall Street analysts had been expecting.

The gain was broad-based, as orders excluding transportation goods rose 3.3 percent and orders outside the national defense sector were up 3.8 percent. The ex-transportation reading was the strongest in almost two years.

The report signals more good news for the recovering U.S. manufacturing sector, which had been hit hard by the 2001 recession and reluctance by businesses afterwards to invest in new plants and equipment.

February orders were revised sharply upward, as well. Instead of the previously reported 2.5 percent gain, the Commerce Department said February orders were up 3.8 percent. Orders have risen in three of the last four months.

Treasury securities prices dipped and the U.S. dollar rose against the euro after the report's release.

"They're very good numbers. It's telling us the manufacturing sector of the economy is clearly in recovery. It looks like we had not only a strong March but an even better February than the government previously estimated," said Gary Thayer, chief economist with A.G. Edwards & Sons in St. Louis.

Another "very encouraging sign," according to Thayer, was orders for civilian capital goods excluding aircraft, which advanced 2.4 percent after February's 2.8 percent rise. The gauge is seen by economists as a proxy for business spending.

Elsewhere within the report, primary metals orders were up 7.2 percent, the biggest gain since October 2003, while orders for machinery rose 3.1 percent. Computer and electronic products, however, registered a comparatively modest 0.2 percent increase.

One notable decline in the report was seen in defense-related capital goods orders, which slipped 6.1 percent, their second decline in three months.

Other recent economic reports have pointed to increasing strength in manufacturing.

On Wednesday, the Federal Reserve's (search) "beige book," an anecdotal report of economic conditions around the country, said factory activity was up in all 12 of the central bank's regions from mid-February through early April.

Earlier this month, the Labor Department (search) said job growth in manufacturing was flat in March. That broke a string of 43 straight monthly declines in factory employment.