Stuttering export markets and over-reliance on the consumer goods sector curtailed the PMI to 51.9 in July, the research showed.
The figure was up 0.5 from a 26-month low of 51.4 in June. The number is based on a survey of more than 600 manufacturers and a posting of above 50 indicates growth.
Rob Dawson, senior economist at Markit commented: "Although an uptick in the headline PMI breaks the decelerating trend in UK manufacturing, growth remains near-stagnant and suggests that the sector is continuing to act as a drag on the economy."
Dawson added: "With the sterling-euro exchange rate still sapping export demand and constraining growth of total order inflows, its seems that we will again look to the service sector to sustain any semblance of reasonable economic growth in the third quarter. "
Survey positives included manufacturing employment rising for the 27th successive month in July. Average input prices also declined and overall output rose.
However, these were countered by a slump in new export orders, raw material shortages and a stagnation in order books.
David Noble, group chief executive officer at the CIPS"Slowly does it this month, as the sector stays in positive mode, but at a softer rate of growth than hoped for given the trend since April 2013."
Noble concluded: "The sector must be wondering how the absence of a significant numbers of new orders will affect manufacturing performance in the coming months."
The data dampened the prospects of an export-led recovery warned Mike Rigby, head of manufacturing at Barclays.
"No two surveys on UK manufacturing seem to chime with each other currently with some painting a promising picture and others a bleaker one. However, what is clear is that domestic demand is still driving growth and with continuing strength in the sterling-euro exchange rate restricting the competitiveness of our exporters, the exporting surge the sector craves to boost growth and help rebalance the recovery seems further away."
