Economy hopes boosted by factories ahead of key official growth data

British and European manufacturers put their Chinese rivals in the shade yesterday amid more recovery signs for the economy.

The CBI's latest snapshot of the industry's fortunes showed that in the quarter to July, UK businesses saw orders grow at their quickest pace since April last year.

The news comes ahead of official estimates today that are expected to show the wider economy picking up the pace of growth to 0.6 per cent between April and June, the best performance since last summer's Olympics.

European manufacturers, meanwhile, pulled out of recession territory in July, according to the financial data provider Markit, registering growth for the first time since February last year and the largest monthly rise in output since June 2011.

The figures formed a contrast with China, where worries over a deepening slowdown for the economic powerhouse intensified as manufacturing output shrank at its fastest pace for 11 months, according to HSBC.

The CBI's survey of nearly 400 businesses found confidence over export prospects growing for the second quarter in a row and employment in the sector rising for a record 12th successive quarter.

The CBI's economics director, Stephen Gifford, said: "Manufacturers have seen a pick-up in activity across the board this quarter, with new orders and production continuing to rise."

In Europe, Markit said French and German manufacturers were leading the recovery, fuelling hopes that the eurozone is finally pulling out of its recession this summer – if only marginally – after six quarters of decline.