The pound had been fairly flat before the data release at 9.30am.
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A figure above 50 signals expanding activity, while anything below demonstrates shrinkage.
USA manufacturing contracted last month for the first time since February, as new orders and output plummeted and factories cut jobs.
United Kingdom manufacturing production increased at its fastest pace in seven months during August, the research group added.
After Britons unexpectedly voted to leave the European Union sterling fell by more than 10 percent against the dollar and the euro, losses that have not been recouped as markets bet on a long-term hit to British economic performance and that the Bank of England will lower interest rates again later this year.
But the ISM’s survey found that export orders increased in August at the same pace as the previous month.
Weak global demand for Chinese-made clothing, toys and electronics has complicated efforts by communist leaders to support trade and prevent job losses in export industries.
On the price front, the survey data highlighted softer increases in input costs and output charges and, in both cases, inflation rates were below their respective trends, Lima said.
“The domestic market showed a marked recovery, especially for consumer products, while the recent depreciation of sterling drove higher inflows of new business from the US, Europe, Scandinavia, the Middle East and Asia”.
Employment also rose for the first time in the year-to-date.
A reading over 50 implies expansion, while one below 50 suggests a contraction. All three major indices started the session higher before reversing to the downside.
“The omens are good, with consumer spending very robust”. We now forecast third quarter GDP growth of 0.3 per cent quarter-on-quarter’. Factory activity reaches a 10-month high in August.
Earlier, Markit Economics’ purchasing manager’s index for August came in at 52, down from July and little changed compared to the consensus forecast.
“Once again, it’s also a worryingly mixed picture across the region”.
Recording “solid improvement”, manufacturing sector growth touched a 13-month high in August bolstered by expansion in new works as well as acceleration in buying and production levels, says a survey. It was expected to remain unchanged at 51.8.
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“It may be that the July’s drop in the manufacturing PMI overstated the sector’s weakness in the immediate aftermath of the Brexit vote and that August’s rebound overstates its strength – but it is certainly reassuring to see the manufacturing sector bounced back in August”.
