US factory activity expands at fastest pace in over 4 years in Aug: Markit

Production of Honda Pilot sports utility vehicles in Lincoln, Alabama, August 12, 2014.
Luke Sharrett | Bloomberg | Getty Images

The U.S. manufacturing sector expanded in August, with the rate of growth exceeding expectations and moving at the fastest pace in more than four years, an industry report showed on Thursday.

Financial data firm Markit said its preliminary or "flash" U.S. Manufacturing Purchasing Managers Index rose to 58 in August, which was its highest since April 2010, from 55.8 in July. Economists polled by Reuters expected a reading of 55.7.

A reading above 50 signals expansion in economic activity.

The output subindex jumped to 60.2 from last month's 59.7.

"August's survey delivers further evidence that robust manufacturing growth momentum has been sustained through the third quarter, with overall business conditions improving at the fastest pace for over four years," said Tim Moore, senior economist at Markit.

"It seems US manufacturers are increasingly confident that the recovery is firmly back on track and are gearing up for a sustained rebound in production schedules over the months ahead."

Markit's gauge of employment in the manufacturing sector rose to 54.6 from 51.2, and was at its highest since a matching 54.6 in March 2013.

Markit's "flash" reading is based on replies from about 85 percent of the U.S. manufacturers surveyed.

By Reuters