Markit Economics’ manufacturing purchasing manager’s index for July came in at an eight-month high of 52.9, as expected.
Markit’s report showed that the sector had a strong start to the third quarter.
Demand picked up in foreign markets, helping export sales rise at the fastest pace since September 2014. Additionally, job creation rose at the strongest rate since July 2015.
The advance estimate of second-quarter GDP on Friday showed that a slowdown in business spending and a paring of inventories slowed the economy’s growth. Nonresidential fixed investment, on things like factories and machinery, fell for a third straight quarter, by 2.3%.
The stronger PMI in July “suggests that manufacturers and exporters will have helped lift the economy at the start of the third quarter,” said Chris Williamson, Markit chief economist, in the release.
Separately, the Institute of Supply Management’s PMI registered at 52.6, missing the forecast for 53.
This report showed that new orders grew at a slower rate, while employment slipped back into contraction, with its sub-index at 49.4. Inventories shrank at a slower rate.
Because ISM and Markit don’t survey the same people and their methodologies differ, their reports are not always identical.
The manufacturing sector continues to be challenged by a strong dollar and weak global growth, although it has pulled out of the lowest depths of its slowdown from mid-2015.