The production volumes increased the most in three months, incoming new work rose at fastest pace since March and job creation moderated across the manufacturing sector.
Stronger rates of output and new business growth were the main factors boosting the headline PMI reading in July. Production volumes expanded at the sharpest pace for three months, with survey respondents generally citing improved domestic demand conditions. Moreover, manufacturers commented on continued investments in new products and efforts to boost operating capacity, while some suggested that reshoring strategies had also provided a tailwind to growth at their plants.
Measured overall, new business levels expanded at a strong pace that was the fastest recorded for four months. The latest survey also pointed to an increase in new export sales, which contrasted with the declines seen in each of the previous three months. However, the rate of new export order growth was only marginal, with some manufacturers noting that the strong dollar and an improving U.S. economy had encouraged them to focus sales efforts on domestic markets. July data pointed to a solid increase in payroll numbers, which continued the upward trend seen through much of the past five-and-a-half years.
Nonetheless, the pace of manufacturing sector staff hiring eased to its least marked since April. Moreover, manufacturers commented on more cautious inventory policies, which contributed to weaker growth of input buying and the joint-slowest rise in stocks of purchases so far this year.
On the prices front, input cost inflation eased from the seven-month high recorded during June. Moreover, prices charged by manufacturing companies rose only slightly, with the rate of inflation the weakest since April.