July’s manufacturing data showed a stronger-than-expected push into expansion territory. A survey of manufacturing supply executives returned a 55.6 reading for the month, 2.3 percentage points above June and the highest reading since May 2022. New orders increased, inventories remained “too low” and manufacturing employment turned positive for the first time in 33 months.

A reading above 50 for the Institute for Supply Management’s Manufacturing PMI signals expansion, while one below 50 indicates contraction. A sustained level above 47.5 signals the overall economy is growing.

July marked the seventh straight month of expansion for the dataset. The update was 1.6 points ahead of analysts’ expectations and consistent with real GDP growth of 2.8%, the Monday report said.

The new orders subindex—an indicator of future activity—was also higher for a seventh consecutive month at 56.7. That was 70 basis points higher than June. Demand sentiment around orders improved to a ratio of 3.5-to-1 positive-to-negative comments. The ratio was 2.7-to-1 in June.

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