WASHINGTON—U.S. manufacturing expanded in February at the fastest pace three years with the arrival of a surge in new orders. The Institute for Supply Management reported Monday that its gauge of manufacturing activity rose to a reading of 60.8 percent last month, 2.1 percentage-points above the January level of 58.7 percent. It was the strongest performance since February 2018. Any reading above 50 indicates expansion in the manufacturing sector. The 60.8 percent reading last month matched a similar reading in February 2018 and the level in those months was the highest since a reading of 61.4 percent in May 2004. The survey found optimism increasing with five positive comments for every cautious comment, up from a 3-to-1 ratio in the January survey. Timothy Fiore, chair of the ISM manufacturing survey panel, said the survey shows that a recovery is ongoing as manufacturers find ways to deal with supply-chain shortages and …