Manufacturing bounce but slowdown fears loom

The industry grew at an annual rate of 4.3 per cent during May – the highest since December 1994 – after expanding by 0.3 per cent over the month, according to the Office for National Statistics (ONS).

But the performance was flattered by comparisons with the collapse in output a year ago when the UK was still stuck in recession and experts say the sector is far from out of the woods. Survey data for June has showed signs of a cooling bounceback among manufacturers as well as nerves in the UK's powerhouse services sector following Chancellor George Osborne's savage Budget squeeze.

Yesterday's figures also showed April's fall in manufacturing output revised sharply lower from 0.4 per cent to 0.8 per cent. Output from the wider production industries, which includes the utilities and mining sectors, rose 0.7 per cent during May.

Howard Archer, chief economist at IHS Global Insight, said: "The key question is can manufacturers sustain healthy growth over the second half of the year and beyond?"