UK manufacturing sector grows at fastest rate for two years as confidence returns

The latest CIPS/Markit survey of the sector showed productivity grew at its fastest pace since April 2011, while new business levels were their highest since February of the same year.

Overall manufacturing expanded by 0.5 per cent in the second three months of the year, Markit said.

So strong was growth in the manufacturing sector that Markit's senior economist, Rob Dobson, forecast the UK economy will have grown a further 0.5 per cent in the second quarter of the year when official estimates of UK GDP are released - taking GDP growth to 0.8 per cent for the year so far.

The monthly health check of the manufacturing sector showed domestic demand continued to rise, while demand from overseas also strengthened.

At 52.5 in June, up from a revised reading of 51.5 in May, the index remained in positive territory for the third month in row – a reading above 50 in the index shows expansion within the sector, a reading below 50 contraction.

Overall, the last three months have seen the steepest improvement in the manufacturing sector for just over two years. Markit added the average index reading for the quarter was also the highest for two years at 51.4.

Moreover, the expansion in manufacturing was broad based across all sectors of the market,  although the strongest rates of growth were the in textiles and clothing, and food and drink categories.

And new business orders continued to rise, for the fourth consecutive month in June.

Manufacturers reported solid demand from domestic markets as well as from Europe, China, North America, Scandinavia and the Middle East.

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