NEW YORK (Reuters) - The pace of U.S. manufacturing growth slowed in February but remained near a nine-month peak thanks to strong domestic demand, an industry survey showed on Thursday.
Financial data firm Markit said its "flash," or preliminary U.S. Manufacturing Purchasing Managers Index fell to 55.2 this month from 55.8, which had been the best showing since April, 2012.
A reading above 50 indicates expansion.
The index for output spiked to 58.1, the highest reading in nearly two years, "suggesting that the economy is set to rebound from the weak patch seen late last year," said Markit chief economist Chris Williamson.
The overall U.S. economy shrank 0.1 percent in the fourth quarter but grew at a 2.2 percent clip for the full year.
Strong demand from U.S. customers continued to fatten firms' order books, though the rate of increase slowed a bit as new orders from abroad shrank for the first time in four months.
The new orders index fell to 56.5 from 57.4 in January. The pace of hiring also slowed slightly.
"The disappointing export performance led overall growth of order books to slow slightly, which in turn caused increasing numbers of manufacturers to think twice about hiring extra staff," Williamson said.
"While the survey therefore paints an encouraging picture of the manufacturing sector, helping to drive a return to growth for the economy as a whole in the first quarter of this year, firms still need to see greater confidence in the longer-term economic outlook for employment numbers to pick up again."
The "flash" reading is based on replies from about 85 percent of the U.S. manufacturers surveyed. Markit's final reading will be released on the first business day of the following month.
Reporting By Steven C. Johnson; Editing by Chizu Nomiyama