May 4 (Reuters) - New orders for U.S. factory goods rose more than expected in March, led by surging demand for electronics products amid the artificial intelligence investment boom.

Factory orders were up 1.5% on the month, the biggest gain since November, from an upwardly revised 0.3% in February, the Commerce Department's Census Bureau said on Monday. Economists polled by Reuters had predicted a 0.5% rise. Orders increased 3.7% on a year-over-year basis in March.

Manufacturing, which accounts for 10.1% of the economy, has been showing some signs of recovery after being hammered by President Donald Trump's sweeping tariffs last year. But other reports on the sector have shown the U.S.-Israeli war with Iran has sent input costs rapidly upward, with oil prices surging by nearly 50%, and supplier delivery times growing longer.

The increase in March was led by the largest single month in orders for the computers and electronics products category in 25 years. Orders climbed 3.6% to $29.6 billion, the most since March 2001. Within that category, new orders for electromedical, measuring and control instruments rose 7.9% to $10.6 billion, a record high.

Orders for durable goods rose 0.8%, as previously reported, while non-durable goods orders were up 2.1% to the highest level since October 2022.