Britain's recession-hit manufacturers saw a ninth consecutive month of growth in February thanks to rising orders and strong exports.
The manufacturing sector's purchasing managers' index remained at January's 15-year high after five successive months above the neutral half-way point, the Chartered Institute of Purchasing & Supply (CIPS) said yesterday.
The positive outlook follows a similarly upbeat business trends survey from the EEF earlier this week.
According to the CIPS survey, manufacturing production in February, rose at the fastest rate since September 1996. The boost was largely down to a substantial gain in new orders, with orders rising for the eighth consecutive month, particularly in the capital, consumer and intermediate goods sector.
Although companies are reporting rising orders across the board, the sharpest rise is overseas and new export orders shot up at the fastest rate for 14 years.
David Noble, the chief executive of CIPS, said: “The manufacturing sector seems firmly back on the road after this severe recession.
“We're really seeing signs that seem to point towards a full sector recovery. Most notably, companies reported that higher demand from export markets wasn't just on the back of the softer sterling, but also improving global market conditions.”
But inflationary pressures are already rising, with both input and output prices at their highest for 18 months as commodity and energy prices creep back up. And purchasing activity during February was the second strongest since November 2007 as manufacturers tried to guard against increases.
CIPS said employment in the sector rose for the second month in a row, though only marginally. The latest expansion of staffing levels was led by increased hirings at small and medium sized |businesses.
Yesterday's positive UK figures were echoed by a similarly upbeat manufacturing PMI for the Eurozone, which also posted a fifth successive month of rising activity and output expanding at the fastest rate for 36 months.
Lee Hopley, chief economist at the EEF, said: “A strong upturn in Germany and France may begin to calm concerns about the strength of key export markets.”
Howard Archer, chief economist at IHS Global Insight, said the figures boosted hopes that the economy can keep on growing.
He added: “It appears that manufacturers are currently benefiting appreciably from leaner stock levels, improved competitiveness in both domestic and foreign markets stemming from the weak pound, and firmer demand in key overseas markets.
There are also signs that domestic demand is picking up.”