Manufacturing activity in the UK increased in May for the 15th consecutive month, reflecting “stronger economic conditions”, said survey complier Markit.
Growth was underpinned by strong domestic and overseas demand and there has been a “sharp re-acceleration” of demand for goods such as plant and machinery.
Market confidence was reflected further in plans for the country’s small, medium and large manufacturing firms to ramp up their hiring over the next three months.
Rob Dobson, senior economist at Markit, said:
“The upturn remains broad-based by sector and is being enjoyed by SMEs and large-scale producers alike. A strong domestic market is meanwhile being supplemented by one of the best growth phases for new export orders in the survey history. The benefits of the manufacturing upswing are also being shared with the wider economy through solid job creation.”
Analysts said the growth in the sector could trigger a buying spree for companies wishing to expand with more confidence.
Mike Rigby, head of manufacturing at Barclays, said:
“As we move further into 2014 and levels of optimism begin to grow, we could start to see increased activity in the M&A space as manufacturers look to further drive cost efficiencies and find more ways to expand into growth markets.”
Despite the positive news, the Bank of England warn that growth will be unsustainable without stronger investment and export growth. Mr Dobson said manufacturing only makes up around 10% of the UK economy and needs to be accompanied by “further surging growth” elsewhere in the economy.
Photo by Bob Jagendorf