Manufacturing is gaining strength in key parts of the world, and it's a good sign for the global economy

The global manufacturing sector is looking pretty good in mid-2017, especially in Europe.

The latest JP Morgan-IHS Markit manufacturing Purchasing Manager Index (PMI) rose by 0.1 point to 52.7 in July, marking the 17th consecutive month that activity levels strengthened from a month earlier.

The PMI measures changes in activity levels across the global manufacturing sector from one month to the next. Anything above 50 signals that activity levels are improving while a reading below suggests they’re deteriorating. The distance away from 50 indicates how quickly activity levels are expanding or contracting.

The survey takes in responses from over 12,000 manufacturers from more than 40 nations, providing a real-time snapshot of how the sector fared in the previous month.

IHS Markit said that Europe continued to drive the improvement in global manufacturing conditions last month, managing to offset a stuttering performance from Asia.

"Growth was again mainly led by European nations, while Asia continued to struggle in comparison," it said.

"Eight of the 10 best-performing countries were located in Europe, with Canada and Australia the only other nations to break into the highest rankings.

The group said that European manufacturers benefited from strong inflows of new export business, with the fastest increases reported in Germany, the UK, the Netherlands, Austria, Spain and France.

The strong European performance masked continued weakness across large parts of Asia in July.

"Around half of the Asian nations covered by the survey registered a contraction in July, including India, South Korea, Indonesia, Malaysia, Thailand and Myanmar," the group said.

"Growth gathered pace in China, but slowed in Japan, Vietnam and the Philippines."

Despite its index hitting a four-month high in July, the United States also lagged Europe, recording the 14th fastest expansion of all nation's surveyed.

This table from IHS Makit looks at the individual subindices that make up the headline PMI reading. Again, a figure above 50 indicates an improvement while a reading below this level points to a deterioration.

All components improved from a month earlier, with faster increases recorded in new orders, along with input and output prices.

Elsewhere global output levels moderated, improving at the slowest pace in 10 months, while employment increased at a slightly slower pace, although staffing levels have now increased in each of the past 11 months.

Markets will get information on the performance of non-manufacturing sectors when IHS Markit releases its global services PMI report on Thursday.

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