Britain's manufacturing sector grew at its strongest rate in more than three years last month and is gearing up for a hiring spree to take advantage of improved conditions across the industry, a key survey has revealed.
In a boost for the Chancellor, George Osborne, ahead of Thursday's Autumn Statement, the closely watched Markit/Cips Purchasing Managers' Index jumped to 58.4 yesterday from 56.5 in October, its highest level since February 2011.
Manufacturers now plan to take on more employees in the coming months with the employment index rising to 54.4. All readings above 50 indicate growth.
"UK manufacturing continued to hit the high notes in November," Markit's economist Rob Dobson said. "It looks as if the recovery in the sector is translating into meaningful job creation."
Mr Osborne was also helped by figures from the Bank of England, which said net lending by banks under the Funding for Lending scheme plan was £5.8bn in the third quarter, more than three times the £1.6bn in the quarter before.
In addition, hopes of a surge in the supply of new housing have been lifted by a large increase in the number of planning permissions granted for new home construction.
The Home Builders Federation (HBF) said that 44,251 permissions were granted in the third quarter of the year on 826 sites across England. This was the highest quarterly approvals figure since the start of 2008, and a 31 per cent increase on the same period last year. The number of social-housing units approved also rose strongly to 6419, up by 14 per cent on a year ago.
However, the HBF added that the number of new homes being approved for construction was still well short of the 60,000 needed each quarter.
"The number of people looking to buy far outweighs the number of available homes on the market, and this hot competition is what's really driving up house prices," said Richard Sexton, director of e.surv chartered surveyors.
The upturn in positive economic data has resulted in calls for Mr Osborne to ease the pressure on families after years of austerity. However, the Chancellor has insisted the Coalition would keep the public finances under tight control, saying moves to cut energy bills and give home buyers £1,000 grants for insulation would be fully funded through a crackdown on tax dodgers.
Some analysts said yesterday's manufacturing figures, which came in above the 56 level expected by the City, could increase the likelihood of interest rates being increased sooner than the Bank of England Governor's Mark Carney has suggested.Reuse content