Overseas demand helps manufacturing growth

The Chartered Institute of Purchasing and Supply's (CIPS) latest

activity index – where a reading over 50 indicates growth – hit 58 for the second month in a row, the strongest since September 1994.

The industry has now grown for eight successive months, with export orders at near-record levels as the weak pound helped firms to win business in China, Europe, the United States and the Middle East.

CIPS said the sector's recovery had "taken everyone by surprise" but warned that manufacturers were still vulnerable amid recent turmoil in Europe due to fears over debt defaults and austerity measures impacting growth.

Chief executive David Noble said: "Given the euro countries are Britain's biggest trading partners, any double-dip recession there would undoubtedly damage the UK manufacturing sector."

Manufacturers have helped the UK's sluggish recovery, with strength in the sector largely behind overall output for the first quarter of 2010 being revised upwards from 0.2 per cent to 0.3 per cent.

The bounce-back is also being driven by firms rebuilding stocks.