HOUSTON--U.S. manufacturing sector reported the greatest improvement in overall business conditions since September 2014, while the service sector continues to expand, the IHS Markit's Purchasing Managers' Index (PMI) showed on Monday.

The PMI data revealed the manufacturing growth was boosted by marked expansions in output and new orders, with the latter growing at the quickest pace in more than 3.5 years. Stronger growth in new orders drove a solid increase in the level of outstanding business at manufacturers.

Robust client demand and signs of sustained pressure on capacities did not, however, lead to improved employment growth. The rate of job creation eased to an eight-month low as firms reportedly pushed for greater efficiency.

Price pressures within the factory sector intensified, with the rate of input cost inflation picking up to the fastest since June 2011. The U.S. service sector continued to pick up, according to the latest data. Although below the long-run series average, the latest reading indicated the 26th successive month of output expansion at service sector firms.

The growth rate of new business at service providers was the fastest since March 2015 and led to a solid rise in outstanding business. Average cost burdens continued to rise in April, with the rate of input price inflation edging up slightly since March.