The latest reading for Markit's flash manufacturing purchasing manager's index came in at 52.1 for August, down from the prior month's 52.9 and lower than economists' expectations of 52.7.
July's reading was the strongest since November 2015, which mitigates the disappointment from August's lower number. Furthermore, the reading was still above 50, signaling expansion.
Markit Chief Business Economist Chris Williamson observed that the August reading is less worrying given the strong number the month prior but the new report was nonetheless a "disappointment."
One of the weakest points of the report, according to Williamson, was growth in orders for manufacturing firms.
"However, a slowdown in overall order book growth is a warning light that domestic demand has waned in August, and the pull-back in hiring suggests manufacturers have become increasingly cautious about the outlook," wrote Williamson in the release.