British manufacturing activity surged to a three-year high in August on the back of the strongest production growth since 1994, a survey showed today.
The Chartered Institute of Purchasing (CIPS) and Supply/NTC said its purchasing managers' index rose to 56.3 last month from an upwardly revised 55.9 in July, the highest level since July 2004 and well above analysts' forecasts.
With any reading above 50 indicating expansion, CIPS/NTC said the sector was now enjoying its longest period of sustained growth in 12 years.
Manufacturing output growth soared to 60.4 from an upwardly revised 58.0 in July - the fastest expansion in nearly 13 years.
Such strength boosted speculation that industry could weather one more interest rate rise this year, after five increases to 5.75 per cent since August last year.
While the domestic market contributed most to growth in August, new export orders improved markedly with a reading of 55.8 - the strongest rate of expansion since January 2004.
Overall, new orders are basking in their most sustained period of growth in more than 12 years. Employment growth hit a three-year high, CIPS/NTC said, with the jobs index rising to 52.5.