Worryingly for the US economy, or at least for the manufacturing sector, there have only been two months of worse results since the economic crisis of 2008 / 2009.
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IHS Markit said its Purchasing Managers Index, which dropped below the key 50 level in July, jumped by a record to 53.3.
Manufacturing activity in Germany expanded in August at the same rate as in the preceding month and remained relatively elevated, Markit showed in its final survey on Thursday.
Markit’s United Kingdom manufacturing survey on Thursday showed factory activity rebounded to a 10-month high in August as the weaker pound boosted exports.
But the ISM’s survey found that export orders increased in August at the same pace as the previous month. In early trading it was at $1.1134, 0.22 per cent lower.
“Firms will now be hopeful that a steady sequence of expanding new business can be maintained throughout the coming months”.
However, the fall in the value of the pound proved a double-edged sword, as input price inflation rocketed to a five-year high, with 44% of companies reporting a jump in purchasing costs.
The Stoxx Europe 600 rose 1% in morning trade, with bank shares climbing for a third straight session.
“The Brexit brakes are off”, said David Noble, group chief executive of the Chartered Institute of Procurement & Supply, which helps Markit compile the survey.
Anything above 50 signals growth, while anything below means a contraction in activity – so the higher the number is, the better things look for the UK.
In contrast, the FTSE 250 index of mid-sized stocks, more sensitive to the domestic United Kingdom economy than the blue-chip index, rose 0.7 percent after the relatively strong manufacturing data.
Britain’s top share index fell on Thursday, as initial gains fizzled out following a jump in sterling sparked by data showing a recovery in United Kingdom manufacturing, while oil stocks also lost ground.
The update comes after strong consumer spending helped the economy expand in the run-up to the European Union vote in June.
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Laith Khalaf, senior analyst at Hargreaves Lansdown, said the manufacturing data adds to the picture of improved sentiment since the immediate fallout of the referendum result.
