BRITAIN’S FACTORIES are creating 5,000 new jobs a month, latest industry figures have revealed.
Manufacturing growth hit a seven-month high in February, according to a closely-watched survey of purchasing managers.
Despite years of talk about a rebalancing of growth, we are still seeing only limited headway
The index shows a strengthening of output and new orders and a solid domestic market.
Rob Dobson, senior economist at survey compilers Markit, told The Yorkshire Post: “We have had a mini-growth revival at the beginning of the year.”
But he warned that the figures also reveal a fall in export orders, showing that growth is still being driven by consumers and suggesting that the rebalancing of the UK economy remains some way off.
The Government has repeatedly underlined the importance of reducing Britain’s reliance on shopping and financial services and increasing business investment and exports to fuel long-term economic growth.
Mr Dobson said: “Scratching beneath the surface and we see a lopsided upturn, with the prime driver being a strong upsurge in new orders and production at consumer goods producers while a near-stalling of demand for plant and machinery points to ongoing weak business investment.”
He said the appreciation of sterling is holding back the progress of UK exporters as their goods become more expensive than foreign rivals.
Mr Dobson said: “It seems that, despite years of talk about a rebalancing of growth, we are still seeing only limited headway in moving away from consumer-driven expansions and towards a greater contribution from exports.”
The purchasing managers’ index reported that the ongoing upturn in the sector had encouraged further job creation, with workforce numbers rising at SMEs and large-sized firms alike.
David Noble, chief executive of the Chartered Institute of Procurement and Supply, said the rising levels of job creation - now in their 22nd month - demonstrate that the manufacturing sector is in “buoyant mood”.
He adedd: “This is good news for the UK economy as higher staffing levels mean more opportunity for economic expansion.”
The index showed factory gate prices fell at the fastest pace since September 2009, while prices paid by manufacturers for raw materials and energy continued to fall sharply.
A separate report yesterday highlighted the important role that manufacturing plays in the UK.
Engineering-related sectors contributed around £280bn in gross value added (GVA) in 2011, equivalent to 20 per cent of the UK’s total, according to the independent study for the Engineering and Physical Sciences Research Council (EPSRC) and the Royal Academy of Engineering.
Engineering-related sectors exported goods and services valued at around £239bn in 2011, some 48 per cent of the total value of exports for that year, said the report by Technopolis.
The study’s steering group was chaired by Professor John Fisher, deputy vice chancellor at Leeds University, who o said the benefits of engineering research and training are pervasive throughout the economy and society from transport to construction, from energy to manufacturing, from digital to communications and media, from health to professional services.
Prof Fisher added: “It contributes more than 20 per cent of GVA and underpins innovation, high value manufacturing, exports and economic growth.
“Sustained investment in engineering research, training and skills is essential to support future economic growth and the resulting benefits to society.”
Building machines to build a better Britain
Business Minister Matthew Hancock has praised a Yorkshire manufacturer for “building the machines that are building a better Britain”.
The Conservative MP visited the 600 Group in Heckmondwike as part of his tour of 100 businesses in 100 days.
The toolmaker has invested heavily in returnuing its manufacturing activities from foreign countries to the UK market.
Mike Berry, managing director, has described “reshoring” as “an aid to profitable growth”.
The listed company has dramatically increased supply, machining and assembly in Yorkshire.