Growth on cards for manufacturing sector in 2011

Jan 5 2011 by Iain Laing, The Journal

THE manufacturing sector appears to have continued its stellar performance last month when it recorded its strongest performance for 16 years, boosting hopes of an export-led economic recovery.

And in the North East the recovery of industry is expected to continue this year, taking many companies beyond the size they were before the recession.

The Chartered Institute of Purchasing & Supply’s (CIPS) activity index, where a reading over 50 indicates growth, jumped to 58.3 in December, up from 57.5 in November, driven by strong orders from overseas.

Rob Dobson, senior economist at Markit and author of the survey, said: “The UK manufacturing sector saw a truly spectacular end to 2010.

“The latest data are consistent with manufacturing production rising at a quarterly rate close to 2%, which should generate a meaningful contribution from the sector to economic growth in the fourth quarter to offset likely weakness in other sectors.

“All of this points to manufacturing being a positive spur to economic recovery in the final quarter.”

And Tony Sarginson, regional manager of manufacturers group EEF, said: “There are really encouraging signs in the sector. It has been steadily increasing for around nine months and many of those companies which have survived have now got back to the level they were at before the recession.

“There are some areas which are not doing as well, such as the construction industry, but there are more, such as defence, oil and cars, which are doing very well. I see this recovery continuing throughout the year.”