The July reading, which climbed 2.3 percentage points from June, marks the highest level since May 2022. This expansion reflects a broader positive trend, as the overall economy has now grown for 21 straight months. Gains were driven by strong performance in the New Orders Index at 56.7 percent and a surge in the Production Index to 58.5 percent, its highest mark since late 2021.

Employment also saw a critical turnaround, with the index reaching 52.8 percent. This return to growth territory ends a 33-month period of contraction, suggesting that manufacturers are increasingly confident in stabilizing their head counts. Despite these gains, supply chain executives continue to navigate a complex landscape. While the Prices Index eased slightly to 71.1 percent, it remains in expansion territory, reflecting persistent cost pressures from tariffs, raw material shortages, and ongoing geopolitical instability in the Middle East.