Manufacturing surge raises jobs hope

Hopes were raised for economic recovery last week as figures showed that the British manufacturing sector grew at its fastest rate for 15 years.

The Chartered Institute of Purchasing and Supply (Cips) and Markit whose index measures productivity have released figures showing that productivity and growth in the sector is now at its highest level since October 1994. The index jumped to 56.7 last month from 54.6 in December, the manufacturing sector has stayed above 50 (level indicating growth) for four consecutive months.

The growth and improvement in the sector represents the biggest jump in export order in the index history and comes as manufacturing in Asia and the United States also grew. A rise in employment in the sector has also lifted hopes for an economic recovery after thousands of manufacturing jobs were slashed during the recession.

Howard Archer, chief UK and European economist at IHS Global Insight welcomes the news suggesting that manufacturers could be starting to benefit from leaner stock levels and improved competiveness in both domestic and foreign markets, stemming from the weak pound.

The chief executive of Cips, David Noble, stated that for the first time in 2 years, there has been an increase in employment. Employment is usually a lagging indicator. It suggests that firms are becoming more confident about the economic future.

Job Centre Vacancies says: Although the manufacturing sector represents a small proportion of total UK GDP, the industry is still a very important part of the economy. It looks like the UK recession recovery will be driven through exports, although manufacturers will have to be wary of inflation and its impact on cost control.

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