The research firm's purchasing managers' index, based on 85 percent of the month's survey results, showed the headline index falling from 52.5 in June to 51.8, as production and new orders fell to the lowest point in a year.
Numbers above 50 in the index indicate growth, but growth has slowed. The production index dropped from 53.4 in June to 52.2. The new orders index slid from 53.7 to 51.9.
The job creation index showed nominally faster gains with the index for employment rising from 52.8 to 52.9.
"The U.S. manufacturing sector is clearly struggling under the pressure from falling exports, which showed the first back-to-back monthly decline for almost three years in July," said Markit Chief Economist Chris Williamson.
"Reassuringly, domestic demand appears to be showing ongoing signs of resilience, encouraging firms to take on more staff," he said.