After months of turmoil, the manufacturing sector is growing again. But for how long, asks Jez Davison?

LAST week the beleaguered UK economy received a boost with news that the manufacturing sector recorded growth in September for the first time in months.

After an initial post-recession bounce-back, the sector has been hit by a wave of plant closures and job losses this year - notably defence giant BAE Systems’ recent decision to axe almost 3,000 jobs from its UK operations.

There are signs, however, that manufacturing is on the mend again.

The Markit/CIPS Purchasing Managers’ Index, in which a reading above 50 indicates growth, jumped to 51.1 in September from 49.4 the previous month - comfortably ahead of the City’s forecast of 48.5.

The surprise boost, which lifted the UK economy’s fragile recovery hopes, was due to a rise in new orders and manufacturers catching up with work backlogs at the fastest pace for two years.

But it was not all good news, with employment falling for the third month in a row and export orders slumping to their lowest level since May 2009 on the back of a slowdown in global growth and turmoil in eurozone markets.

Trade body EEF, which represents around 100 manufacturers on Teesside, said local firms were braving the tough conditions well.

Tony Sarginson, regional manager, said: "Despite all the doom and gloom, on Teesside I’m not detecting any real slowdown.

"Manufacturers are grabbing these opportunities with both hands.

"The mood is positive, order books are looking healthy."

He said manufacturers were protecting themselves against the volatile trading conditions by expanding their supply chains and breaking into new markets. But he said some firms lacked the confidence to invest in plant, machinery and staff amid media talk of a double-dip recession.

"I would discourage that sort of talk," he said. "I would encourage manufacturers to be confident. If they were to invest, it would pay off in the long run."