UK manufacturing sector surges in June

Manufacturing growth shot up in June

Manufacturing output surged in June at the strongest pace since the end of 2010, according to figures from the Office for National Statistics (ONS).

Manufacturing output rose 1.9% month-on-month in June, following declines in both May and April.

This growth came at more than twice the rate expected by analysts.

The latest upbeat news follows a stream of recent economic data that has indicated an improvement in the UK economy.

• Retail sales enjoyed their fastest July growth in seven years, according to the British Retail Consortium, as the heatwave boosted sales of swimwear, sandals, sun cream, beer and barbecue foods

• UK car sales enjoyed another strong month in July, according to the Society of Motor Manufacturers and Traders, with a total of 162,228 new cars registered in the month, up 12.7% on a year earlier

• On Monday, a closely-watched Purchasing Managers' Index (PMI) survey indicated that the UK service sector expanded last month at its fastest pace since December 2006

• Last week, the PMI survey for the construction sector suggested it was growing at its fastest pace for three years.

Picking up pace

Overall, industrial production, which covers output from the UK's factories and mines, rose by 1.1% between May 2013 and June 2013.

The figure was held back by lower oil and gas extraction and a fall in energy output, the ONS said.

However, manufacturers reported rises in output across all sectors, with the strongest contribution coming from transport equipment, up 5.3%.

Lee Hopley, chief economist at manufacturers' organisation EEF, said chemicals, electrical equipment and transport had shown particular strength over the past three months.

"The production data gives further weight to the view that manufacturing activity will continue to gain pace, becoming a more important contributor to growth in the year ahead," she said.

Manufacturing output was up 0.7% between the first and second quarters of 2013 and up 2% from June 2012.

The statistics mirrored the recent manufacturing PMI survey by Markit, which indicated that the sector grew at its fastest pace for more than two years in July.

But Barclays analyst Simon Hayes warned industrial output still had a long way to go to reach levels seen before the financial crisis.

"Even with these punchy out-turns, the level of industrial production is 13% below its pre-crisis level, while manufacturing output is nearly 9% lower," he said.