South Korea's PMI remains in contraction in August

AFP  Getty Images

AFP Getty Images

Firmer foreign demand was a key driver of new order growth, with export sales rising to the greatest extent in over seven years in August.

The Nikkei/Markit Manufacturing Purchasing Managers' Index rose more than three points to 51.2 in August from 47.9 in July, beating the median economist forecast of 49.3 in a Reuters poll.

The strongest euro exchange rate in two and a half years did little to dent demand for French-made goods as the flow of new orders and backlogs of work grew, the survey showed.

The latest figure signaled the third successive improvement in Greek manufacturing sector conditions, and the sharpest since August 2008.

Taiwan's manufacturing survey saw the fastest growth in four months, while South Korea's exports beat expectations and posted their longest run of growth in nearly six years.

The index for new export orders was also revised down to 51.3 from a flash reading of 52.2. The pick-up in new business was generally more modest than in China, however, suggesting its economic growth may moderate from an eye-popping 4% annualized rate in the second quarter.

Companies expanded their production schedules and buying activity, while business confidence rose to its highest level in five months.

The UK's manufacturing industry smashed expectations in August, after data showed activity in the sector jumped to a four-month high.

The dollar held stronger in Asia on Thursday with China manufacturing data coming in better-than-expected and investors generally upbeat on the regional view and chance s for US tax cuts later this year.

While input price inflation remained solid, strong client demand boosted manufacturers' pricing power, leading to higher factory gate prices on average, the survey showed.

Supply shortages put upward pressure on prices and there were further reports of capacity constraints.

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