Indicators from the Markit/CIPs Purchasing Managers Index for July show the strongest business confidence in the UK for over two years.
The index jumped to 54.6 in July, up from 52.9 in June, to enjoy a fourth consecutive month of growth.
This reading is the strongest since March 2011 and far exceeded the expectations of economists.
Orders for UK goods grew both domestically and in exports markets leading to a sharp decrease in inventory which Markit said bodes well for the coming quarter.
Industrial companies indicated that they felt the same, hiring more staff than they have for two years.
Observing the figures, Lee Hopley, chief economist at manufacturing trade body EEF said:
“The good news continues to roll in for UK manufacturing with most markets, including the domestic one, supporting new orders whilst improving activity is now evident across all sub-sectors. And with signs of recruitment picking up too, there isn’t much in the way of negative news in today’s survey.”
She continued to says that conditions are aligned for manufacturing “make a more positive contribution to growth through the rest of the year.”
Mike Rigby, head of manufacutirng at Barclays, the bank, agreed. He said the manufacturing sector is “starting to realise a slow and steady recovery against a consistently benign backdrop.”
He congratulated exporters on their success in breaking away from the overall economic growth rate and concluded, “Hopefully, with continued certainty of a robust home market, this will further improve confidence to explore those new market opportunities further afield.”
