The manufacturing sector built on a strong start to the year by posting its fastest growth for five months in April, figures showed.
Data from the closely watched CIPS/Markit purchasing managers’ index survey gave a better-than-expected reading of 57.3 - where the 50 mark separates growth from contraction. It was up from 55.8 in March.
It added to hopes for the sector after official figures earlier this week showed it grew by 1.3% over the first three months of 2014, its strongest quarterly performance in nearly four years, although it is still well off its pre-recession level.
The pound rallied to a new four-year high of more than 1.69 against the US dollar as the latest figures make it increasingly likely that the Bank of England will hike interest rates early next year.
The survey showed manufacturing employment grew for the 12th consecutive month, while production surged ahead.
Increasing new orders reflected improved demand from both domestic and export markets, the latter including North America, Europe, Asia and the Middle East.
Rob Dobson of Markit said the performance for the month “places the sector perfectly” to build on the robust first quarter expansion.
He said the survey suggested manufacturers were creating jobs at the rate of 10,000 per month.
David Noble, chief executive of the Chartered Institute of Purchasing and Supply, said: “Manufacturing continues to bask in the spring sunshine, with solid growth and mounting optimism for the months ahead.”
Neil Prothero, deputy chief economist at EEF, the manufacturers’ organisation, said: “Manufacturing’s upturn is continuing apace with a rebound in productivity, solid job creation and above-average real wage gains across the sector highlighting the vital role being played by industry in the UK’s continuing recovery.
“The domestic market remains the dominant driver of manufacturing activity, although there are some encouraging signs from a rise in export flows that the gradual revival in eurozone demand is beginning to feed through to manufacturers’ order books.”
Howard Archer, chief European and UK economist at IHS Global Insight, said it reinforced the belief that the UK was on course for 3% growth this year.
Jonathan Loynes of Capital Economics said the data was “encouraging evidence of a favourable rebalancing of the UK’s economic recovery”.
Growth has so far been skewed towards consumer spending and the services sector.
James Knightley of ING Bank said it suggested the economy “isn’t losing momentum”, making inflationary pressures from higher wages more likely and pointing to a risk of an earlier interest rate rise.
