A manufacturing “mini-renaissance” is driving the sharpest rate of job creation in the sector for almost three years, the Chartered Institute of Purchasing & Supply said today.
Its latest snapshot of manufacturing fortunes showed the pace of overall growth accelerating last month with firms adding staff to meet rising workloads at the fastest rate since May 2011.
Cips’ purchasing managers index, where a score over 50 indicates growth, rose from 56.6 to 56.9 in February, driven by a strengthening domestic market as well as an encouraging increase in new product launches and investment in new machinery.
Rob Dobson at survey compiler Markit said: “This mini-renaissance in manufacturing is also driving the sharpest job creation since the middle of 2011, which will support the broader economic recovery.”
Manufacturers managed to grow at a faster pace despite the pressure of a rising pound dampening growth in export orders.
But speculation over interest rate rises has mounted with better economic news, prompting Bank of England rate-setters to stress that market expectations of an interest rate rise in the spring of next year are “reasonable”.
Cips chief executive David Noble said British manufacturers had been “remarkably resilient”. He added: “Overseas demand, despite remaining elevated, lost some of its impetus, with exchange rate fluctuations playing a part.”
Signs of a jobs recovery in manufacturing increase the chances of the Bank hitting its 7 per cent threshold for considering interest rate rises.
It broadened the focus of its forward guidance policy towards a wider assessment of spare capacity as it tries to gauge when the recovery will feed into inflation.
But recent data has showed signs of a long hoped-for rebalancing as business investment and exports boosted the wider economy in the fourth quarter.