UK manufacturing activity grew at its fastest for 15 years in March, according to the purchasing managers' index (PMI).
The PMI rose to 57.2 last month, from 56.5 in February making it the best monthly growth figure since October 1994.
The PMI is calculated from data on new orders, production, employment, and purchasing. An index reading above 50 indicates that activity is rising. Anything under 50 shows contraction.
Commenting on today’s PMI numbers, EEF Chief Economist, Lee Hopley, said: “Todays figures are further evidence of a more broad based recovery in manufacturing in the UK and across the globe. As well as an improving domestic market, they should dampen criticism that manufacturers are failing to take advantage of a competitive currency and a more sustained upturn in export markets.”
Graeme Allinson, Head of Manufacturing, Transport and Logistics at Barclays Corporate, says “there is a renewed momentum to manufacturing recovery evidenced by the large growth shown in today’s figures. This is an important confidence building affirmation that production levels are moving in the right direction following a few months of flatness in the sector, and these numbers are a far cry from the heavy declines of last year.
“Orders are steadily increasing as the effect of re-stocking becomes apparent. Exports too have shown signs of picking-up but rapid growth in this area is unlikely as 60 per cent of UK exports head to Europe where growth rate is muted. This leaves the performance of UK manufacturing inextricably linked to European demand.”
Export order growth fell from February’s high, but the survey found that sterling’s weakness was still benefiting UK exporters.
On Tuesday, the Office for National Statistics revised up its forecast of economic growth for the final quarter of 2009, saying that the economy grew by 0.4%.