US factory activity hits four-year high in July

US manufacturing activity grew faster in July, with the Institute of Supply Management's manufacturing index reaching a four-year high despite continued uncertainty over prices and the war in the Middle East.

ISM said Monday that its manufacturing index rose to 55.6 percent, up 2.3 percentage points from a month earlier. A reading above 50 percent indicates expansion, and the index has stayed above that level for seven months.

Susan Spence, head of the ISM survey, said US manufacturing activity remained in expansion territory and grew at its fastest rate in more than four years. ISM said Monday's reading was the highest since May 2022.

The figure was above the 54 expected by economists polled by Dow Jones Newswires and The Wall Street Journal. ISM's manufacturing employment index also entered expansion for the first time in almost three years.

ISM said 62 percent of respondents listed negative sentiment. It said price volatility was mentioned in 57 percent of negative comments, while US President Donald Trump's war on Iran was referenced in 43 percent of those comments.

The survey also included comments pointing to uneven conditions across industries. One respondent in the chemical products sector said some customers were reducing inventory while others were bringing demand forward. A respondent in the machinery sector said products linked to data centers were in full procurement and manufacturing ramp-up.