Economic activity in the U.S. manufacturing sector grew unexpectedly in July for the 38th consecutive month while the overall economy grew for the 57th consecutive month, say the U.S.’s supply executives in the latest Manufacturing Institute for Supply Management Report On Business.

The ISM’s manufacturing index rose to 54.7 from 53.8 in June. Economists had expected the index to fall to 53.5, with most estimates ranging from 51 to 55.3.

The ISM’s measure has been 50 or above, the line between expansion and contraction, since May 2003. Businesses continue to invest in new technology and equipment, though at a slower pace than earlier this year, helping to prop up economic growth as consumer spending slows.

“Manufacturing growth accelerated in July driven by an upswing in production following June’s increase in new orders. Employment expanded after a one-month decline, while inventories grew after two months of contraction,” said Norbert J. Ore, chairman of the Institute for Supply Management’s Manufacturing Business Survey Committee. “The overall message is that manufacturing is proving to be quite resilient in the face of higher interest rates and weakening consumer spending. Strong demand continues to put upward price pressure on primary metals including copper and nickel.”

The 12 industries reporting growth in July — listed in order — are: primary metals; food, beverage and tobacco products; electrical equipment, appliances and components; chemical products; furniture and related products; miscellaneous manufacturing; petroleum and coal products; computer and electronic products; paper products; plastics and rubber products; non-metallic mineral products; and machinery.