British factories are roaring back to life, the recovery is “picking up speed”, and risks are abating, economists declared after a surprisingly strong manufacturing rebound in July.
The pound strengthened after the July purchasing managers index for manufacturing jumped to 54.6 from an upwardly revised 52.9 in June, where a reading above 50 indicates growth.
It was the strongest reading since March 2011 and the sector’s fourth straight month of expansion, beating economists forecasts by a wide margin.
Demand for UK manufactured goods was rising in “most regions, including the eurozone, Australia, China, Africa, Russia and the US”, he added.
Ms Hopley said: “The good news continues to roll in for UK manufacturing with most markets, including the domestic one, supporting new orders whilst improving activity is now evident across all sub-sectors. And with signs of recruitment picking up too, there isn’t much in the way of negative news in today’s survey.”
Manufacturing employment rose for the third successive month in July, with the rate of job growth reaching a two-year high.
British manufacturing suffered a torrid 2012, contracting 1.7pc, and is still producing more than 10pc less than before the financial crisis. The industry grew 0.4pc in the three months to June, and signs of accelerating growth will be welcome. Moreover, evidence of economic improvements in the eurozone also bring the hope that the UK’s main trading partner could start importing more – providing UK factories a further lift.
