UPDATE: Poland's July Mfg PMI 46.5, Above Consensus

WARSAW -- Business confidence in Poland's industrial sector was much better than expected in July, as the severity of the downturn slowed and new orders, jobs and purchases declined at slower rates.

A survey of 300 industrial companies prepared by Markit Economics, released Monday, showed that Polish manufacturing PMI rose sharply to 46.5 in July, from 43.0 in June.

That is well above the 43.8 average forecast in a Dow Jones survey of 10 bank economists.

The PMI reading was the highest since June 2008, suggesting that the manufacturing sector is regaining ground.

Month-on-month PMI rose 3.5 points, the fastest monthly gain since the survey began in June 1998.

"The PMI posted a record month-on-month gain in July to signal a marked easing in the overall contraction in Polish manufacturing. New work received fell at a slower rate, while the ratio of new orders to stocks was at its highest since March 2008," Markit economist Trevor Balchin said in a release.

This suggests firms will soon ramp up production to replenish warehouses, Balchin said.

A figure above 50 indicates an expansion, while one below that level signals a contraction.