The latest reading pointed to a marginal improvement in the health of the sector that was nonetheless the strongest reported since April, S&P Global said in a statement.
According to it, the headline PMI was buoyed by a renewed rise in production levels during July, though only slight, the expansion was the first since December 2021.
S&P Global also noted companies reported that increased new orders helped boost output, but some firms commented that raw material prices remained elevated and supply constraints persisted, holding back a stronger recovery.
S&P Global Market Intelligence chief business economist Chris Williamson said business conditions are improving yet remain tough, with firms struggling against headwinds of falling export demand, persistent supply constraints and rising prices.
However, he noted that July saw the best expansion in output so far this year, in part reflecting the gradual revival of manufacturing as the worst of the pandemic impact fades.
"Looking at the historical relationship between the PMI and official statistics, the latest reading signaled that industrial production is now increasing gradually after broadly stagnating throughout the first half of 2022, to hint at an encouraging start to economic growth in the third quarter," he said.
However, he said a major uncertainty remains the path of global demand, as recession risks have intensified in the United States and Europe, which could severely limit any export-derived growth.
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