By Agence France-Presse U.S. manufacturers expanded activity in July for the first time in five months but still cut jobs, another sign that a jobs-scarce recovery is taking hold, an industry survey showed Aug. 1. The Institute for Supply Management (ISM) purchasing managers' index, based on a survey of supply executives, rose to 51.8 points in July, roughly in line with expectations, from 49.8 points in June. Any reading below 50 points indicates an industry contraction. "While the overall economy continues to improve, the manufacturing sector reversed its recent trend of contraction and grew during July for the first time in five months," said survey chief Norbert Ore. A breakdown of the figures showed new orders and output rose at a faster pace, with the new orders index climbing 4.4 points from June to 56.6 in July and the production index edging up 0.4 points to 53.3. But the employment index declined 0.1 point to 46.1 -- the 34th consecutive month below 50 points. "The improvement in new orders continues to be very encouraging, and reinforces the possibility that the economy will continue to improve during the second half of the year," Ore said. "Overall, the manufacturing sector is trending positively and appears poised to continue a pattern of growth in the second half of the year." Copyright Agence France-Presse, 2003