Mixed blessings for the economy in run-up to election
Manufacturing grew at its fastest pace in eight months in March, figures showed, but separate data showing a decline in UK productivity are likely to raise fresh concerns about the sustainability of the wider recovery.
The sector posted a reading of 54.4 on the closely-watched CIPS/Markit purchasing managers' index (PMI) survey - where 50 separates growth from contraction. It was up from 54 in February.
It is the latest economic boost in the run-up to the general election after revised official data on Tuesday showed the UK had grown by 2.8% in 2014, up from a previous estimate of 2.6%.
But further data from the Office for National Statistics (ONS) published yesterday are likely to add to worries about the future of the recovery, as improvement in UK productivity failed to materialise. It fell by 0.2% in the fourth quarter of 2014 and is slightly lower than pre-economic crisis levels in 2007, the ONS said. The pound dropped a cent against the US dollar.
Yesterday's manufacturing PMI pointed to a reading of 53.8 for the first quarter as a whole, the best since the second quarter of last year, while jobs in the sector are being created at the rate of about 5,000 a month.
Figures showed new export orders enjoying their fastest growth in seven months following a slight dip in February, with improved demand from the US, China, Germany, the Netherlands, Canada and the Middle East. The sector's upturn saw employment grow for the 23rd consecutive month.