Production and jobs pick up

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MANUFACTURERS stepped up production in April more rapidly than in any month since the end of the recession, with employment also picking up, according to a new survey from the Chartered Institute of Purchasing and Supply.

The purchasing managers' index rose from 56.6 per cent in March to 58 per cent in April, with values over 50 per cent indicating that industry is expanding rapidly.

'April has been a bumper month for manufacturers. Purchasing managers have seen a rapid rise in activity on the production line and a strong surge in new orders,' said Peter Thomson of the CIPS. 'Delivery times have lengthened considerably as suppliers grapple with the growth in demand.'

The survey shows factory output rising in all parts of the country and in all sectors of industry. New orders were boosted by a reported increase in advertising and promotion, but demand for exports grew more slowly than demand from domestic consumers. Orders grew most quickly in Wales, the south- west and the Midlands.

The survey points to a small rise in manufacturing employment in April. Companies in consumer industries and northern England continued to shed jobs. Purchases from suppliers also grew sharply and prices rose for the fifth successive month.

More worryingly, the survey suggests manufacturers are already having difficulty coping with rising demand.

Stocks of finished goods fell sharply as demand outstripped production, while companies cut back stocks of raw and semi-manufactured materials to help their cash- flow. Suppliers' delivery times lengthened significantly.