Manufacturing production rises

Manufacturing production rose for the first time in more than a year in June

Manufacturing production rose for the first time in more than a year in June - raising hopes that the battered sector could be emerging from "gloom and doom", a survey said.

The Chartered Institute of Purchasing & Supply's (CIPS) report said output in the industry rose for the first time since March 2008 last month, with a reading of 52.1 being above the neutral 50 mark.

And its overall activity index - which takes in data for new orders, production, employment, suppliers' delivery times and stocks of purchases - posted its highest reading since last May, with a rating of 47, although this was still a decline.

The Purchasing Managers' Index (PMI) has risen for the last four months, leading to hopes that manufacturing is edging its way out of recession.

Jonathan Loynes of Capital Economics said taken alongside a "modest improvement" in survey data for the service sector, "the figures support the view that the economy contracted by much less in the second quarter than the 2.4% drop seen in the first quarter".

The CIPS survey showed that manufacturing performance in the second quarter was a "noticeable improvement" on the first three months of the year.

But June's figures still indicated declines in many key areas of the industry, such as new orders and employment, although these downturns were shown to have eased further.

David Noble, chief executive at CIPS, said the rise in output indicated that the sector "may finally be coming out of recession".

"The latest PMI data suggests that after months of gloom and doom, there are some signs of relief for the UK manufacturing sector," he said.

"However, that such data can be read so positively really highlights how bad things have been over the past 15 months."