Manufacturing in the United States unexpectedly expanded in June for the first time in five months, signaling that exports and government rebate checks are helping companies weather the housing slump and increased costs, Bloomberg reported.

The Institute for Supply Management’s factory index rose to 50.2 from 49.6 in May, the Tempe, Ariz.-based group said today. A reading of 50 is the dividing line between expansion and contraction. The group’s index of raw-material costs jumped to the highest level in almost three decades.

Overseas demand for U.S.-made products is helping to keep factories running at the same time that federal tax rebates have boosted consumer spending. The improvement signals the United States might be able to avoid a deep and protracted economic slowdown even as the housing slump worsens and food and fuel prices soar.

Economists had forecasted that the index would decrease to 48.5 from 49.6 in May, according to the median of 78 projections in a Bloomberg News survey. Estimates ranged from 46.6 to 50.5.

A separate report from the Commerce Department showed construction spending fell 0.4 percent in May, less than forecast, as work on hotels, power plants and public hospitals helped cushion the slowdown in homebuilding. Private residential projects fell 1.6 percent in May, the 25th drop in the past 26 months, after a 1.7 percent drop in April.