Global manufacturing growth expanded at the fastest pace in three months in July and cost pressures hit their highest levels in almost two years, a global indicator based on national surveys showed on Tuesday.
The indicator, produced by J.P. Morgan with research and supply management organisations, rose to 55.6 from 55.0 in June and came in well above the 50 level the divides growth from contraction. Higher energy and commodity prices pushed the input price index to 73.3 in July, its highest level since October 2004, from June's 71.8.
The index combines survey data from countries including the United States, Japan, Germany, France, Britain, China and Russia. It showed output growth and job creation in the sector expanding at a faster rate, but new orders growing at a slightly slower pace, with that index falling to 56.9 from 57.2.
"Growth of output and employment picked up in July as final demand remained solid. Production is still rising at a robust level of around 5 to 6 percent," said David Hensley, director of global economics co-ordination at J.P. Morgan. The global manufacturing suppliers' delivery times index fell to a 22-month low of 42.9 in July.
The US manufacturing survey, published by the Institute for Supply Management on Tuesday, showed an unexpected rise in July while prices paid by manufacturers registered their highest reading in nine months.
The headline index of US factory activity rose to 54.7 in July from 53.8 in June, beating economists' forecasts for a fall to 53.7, while the prices paid index rose two points to 78.5, showing an increase in inflationary pressures.
The US Federal Reserve has already lifted its benchmark interest rate to 5.25 percent from just 1.0 percent two years ago as central banks focus on heading off inflation.
In the eurozone, the pace of manufacturing growth eased. The RBS/NTC Eurozone Purchasing Managers' slipped to 57.4 in July from 57.7 in June, in line with expectations.
Price pressures also mounted in the euro zone, supporting expectations the European Central Bank would step up the pace of rate hikes and increase rates to 3.0 from 2.75 percent on Thursday.
The British manufacturing survey showed growth in the sector slowing in July as firms' costs rose at their fastest pace since the start of 2005, cementing the view that rates are unlikely to move up soon.