U.S. manufacturers signalled a relatively strong start to the third quarter of 2016. Output growth picked up markedly since June, driven by a robust and accelerated expansion of incoming new work. While domestic demand remained the key source of growth in July, there were also signs of renewed momentum in external markets.

Reflecting this, new export sales expanded at the fastest pace since September 2014. Increased workloads also contributed to rising payroll numbers and a solid upturn in input buying during July.

The seasonally adjusted Markit final U.S. Manufacturing Purchasing Managers' Index™ (PMI™) registered 52.9 in July, up from 51.3 in the previous month and comfortably above the postcrisis low seen in May (50.7).

The final PMI reading for July was unchanged from the earlier 'flash' reading (52.9). Improving business conditions reflected stronger rates of output, new order and employment growth during the latest survey period. July data signalled a sustained rebound in production volumes across the manufacturing sector. Higher levels of output have been recorded in each of the past two months, with the latest expansion the fastest since November 2015. Anecdotal evidence cited greater inflows of new work and supportive economic conditions.