The U.S. manufacturing sector expanded strongly in September, shaking off at least temporarily the impact of Hurricane Katrina.

The Institute for Supply Management said today its manufacturing index advanced to 59.4 in September from 53.6 the month before, for the industrial sector’s 28th consecutive month of growth.

A reading above 50 indicates the sector is expanding; below 50 indicates manufacturing activity is shrinking. The index is compiled from a survey of purchasing executives in industries across the United States.

“While energy prices and the impact from Hurricane Katrina are major concerns, the manufacturing sector has regained significant momentum” in September, said Norbert Ore, director of the ISM survey.

The report noted that 16 industries saw growth last month, led by businesses in the paper, wood and electronics and components industries. The ISM said its report captured very little of the impact of Hurricane Rita, a less powerful storm.

Within the report, an index of new orders rose to a reading of 63.8 in September from 56.4 in August, while the production index rose to 63.1 from 55.9 and the employment index climbed slightly to 53.1 from 52.6, for the third consecutive monthly increase in hiring.

Also showing a big gain amid the continued run-up in energy prices was the ISM’s inflation gauge. The prices index jumped to a reading of 78 from 62.5 in August. That 15.5-point increase followed a 14-point increase from July to August, the ISM noted.

Meanwhile, U.S. construction spending climbed a second straight month during August as outlays increased in both the private and public sectors. Total spending rose 0.4% to a seasonally adjusted annual rate of US$1.109 trillion, the Commerce Department said today. Spending climbed by 0.3% in July; it was originally seen flat.

August residential construction spending rose by 0.2% to $621.1 billion. Nonresidential construction spending increased by 0.7% in August.