The latest manufacturing figures are reason to be optimistic although the recovery may still wobble in the coming months according to a Birmingham financier.
Ray O’Donoghue, managing director in the Midlands at Barclays Corporate, spoke after the manufacturing Purchasing Managers’ Index (PMI) showed expansion at another 15 month high.
“The markers of recovery are taking hold in the manufacturing sector,” said Mr O’Donoghue.
“The high growth rate evident in today’s figures represents a good start to 2010, building on the strength of January’s growth and moving beyond the long period of dead-calm felt within the industry up until the start of the New Year.
"With exports in the strongest position they have been for fourteen years and output levels high, manufacturers will be optimistically looking towards consistent positive growth this year.
“With recovery gathering momentum however, it is still likely that we will see figures bouncing around in the near future as there remains unprecedented levels of uncertainty that will continue to affect recovery. Until this uncertainty, led by general economic influences, passes we can expect to see a recovery of peaks and troughs, but one of steady progress.
“There is government focus on driving forward the agenda of UK manufacturing, a sentiment echoed across all parties, and although a lot will depend on fundamental effectors in 2010, including tax increases, VAT levels, and the election results, with continued support the sector will remain in a positive position.”
“The figures are particularly encouraging for the Midlands given its manufacturing base. Local manufacturers are reporting that the job position is stabilising and it is new orders primarily on the back of world trade that are driving the improved figures.”
The survey found that its headline activity index, where a score over 50 registers growth, showed a reading of 56.6 - unchanged on January and the highest since October 1994.
CIPS said total new business rose at a rate close to January’s six-year high as firms benefited from successful product launches and clients rebuilding their inventories.
Growth of new export orders accelerated to its fastest since at least January 1996, with gains linked to higher sales in the United States and Asia and supported by the current weakness of sterling.
CIPS chief executive David Noble said: “We’re really seeing signs that seem to point towards a full sector recovery.
“Most notably, companies reported that higher demand from export markets wasn’t just on the back of the softer sterling but also improving global market conditions.”