After hinting at major gains earlier this month, Markit confirmed (link opens as PDF) today that its Manufacturing Purchasing Managers' Index (PMI) stands at a four-month high for July.

Markit's metric clocked in at a finalized 53.7, a 1.8-point increase over June's eight-month-low of 51.9. Analysts had expected a positive push for July, but their 53.1 estimate proved slightly too conservative for the latest reading.

An above-50 rating signals growth, and July's index components paint a pretty picture for manufacturing. New orders increased at their fastest rate in six months to 55.5, while output headed 1.3 points higher to 54.8. New export orders and employment moved from June contraction to July expansion, and backlogs also built up as a potential sign of continued demand. Inventories shrank after growing in June.

Despite the bounce-back, Markit economist Mark Wingham notes that the month's gains aren't necessarily reflective of a long-term recovery:

[T]he rate of manufacturing growth remains weaker than at the start of the year. In particular, employment is generally rising at a disappointingly weak pace and, despite growing at the fastest rate in 2013 so far, the increase in new export orders could be payback from declines in the previous two months.

Markit is a financial information services company. The Institute for Supply Management released its own July manufacturing figures today, also pointing to positive growth. link


Fool contributor Justin Loiseau has no position in any stocks mentioned. You can follow him on Twitter @TMFJLo and on Motley Fool CAPS @TMFJLo.

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.