Manufacturing output hits a seven month high

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The Independent Online

Hopes of a private sector-led recovery were boosted today after official figures revealed growth in Britain's manufacturing sector rose to its highest level for seven months in October.

The Office for National Statistics (ONS) said manufacturing output rose 0.6% month on month in October - the best reading since March and double expectations in the market.

The ONS also revised up the result for September, from a paltry 0.1% to 0.2%.

Experts said the figures give hope that the private sector can help pick up the slack created by the public sector following George Osborne's mammoth spending cuts.

Vicky Redwood, senior UK economist at Capital Economics, said: "It looks like the manufacturing industry is in a good position to help to offset some of the effects of the looming squeeze.

"But as we have warned before, the sector isn't big enough on its own to keep the recovery going as the public and consumer sectors retrench."

The wider measure of industrial output fell 0.2% month-on-month in October, according to the ONS, but this was mainly due to sharp falls in the highly volatile mining oil and gas sectors.

Recent surveys from the manufacturing sector have been encouraging, with the Chartered Institute of Purchasing & Supply's (CIPS) activity index for November showing the fastest rate of growth for 16 years.

Jeegar Kakkad, senior economist at manufacturing body EEF, said: "Industry is continuing to maintain its momentum and make up for lost ground during the recession, though there will be challenges in sustaining this against what is likely to be a similarly challenging start to 2011."

"The outlook for demand in overseas markets, particularly developed ones, will be one factor in determining whether manufacturing will continue to drive the broader economic recovery," he added.