Markit Economics released its manufacturing purchasing managers' index (PMI) for the U.K. on Monday. The Markit/Chartered Institute of Procurement & Supply manufacturing PMI for the U.K. increased to 51.9 in July from 51.4 in June, exceeding expectations for a rise to 51.6.
A reading above 50 indicates expansion.
The increase was driven by the strong performance of the consumer goods sector.
New orders dropped to 52.2 in July, the lowest level since September 2014. The stronger pound weighed on new orders.
"Although an uptick in the headline PMI breaks the decelerating trend in UK manufacturing, growth remains near-stagnant and suggests that the sector is continuing to act as a drag on the economy. With the sterling-euro exchange rate still sapping export demand and constraining growth of total order inflows, its seems that we will again look to the service sector to sustain any semblance of reasonable economic growth in the third quarter," Markit's Senior Economist Rob Dobson said.