The Purchasing Managers' Index came in at 50.9 in August, but down from 51.7 in July. However, the score remained above the neutral 50, suggesting expansion in the sector.
The marginal improvement was partly due to weaker rises in output and new business. As a result, job cuts quickened from July, while firms lowered selling prices at the fastest rate since October last year.
"Business activity rose solidly, but the expansion was markedly weaker than in July, which will dent hopes of a swift recovery from the COVID-19 pandemic," David Owen, an economist at IHS Markit, said.
Firms have not seen a full-scale uplift in demand to pre-pandemic levels and many commented that market conditions remained strongly depressed, the economist added.
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