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.
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