The British manufacturing sector expanded at its fastest pace this year in October, new data showed today.
The Chartered Institute of Purchasing and Supply/RBS purchasing managers' survey saw the PMI index unexpectedly climb to 51.7 in October from 51.5 in the previous month. Economists had forecast it to remain steady at 51.5.
Robust factory output growth and a jump in export orders to a 15-month high buoyed the sector, while prices at the factory gate rose for a third month running.
Although output and new orders continued to expand, companies shed jobs for a seventh straight month as they struggled to pass on rising input prices due to the climbing cost of oil and other commodities such as steel.
The output index edged up to 53.1, matching the highest this year in January and suggesting that manufacturing has turned the corner after official figures showed it in recession in the first half of the year.
New orders expanded for a fifth straight month, and the exports index rose to its highest since July 2004 at 53.5 from 53.3.
The report also suggested British manufacturers were having a hard time passing on their increased costs in the past month, which again stemmed from rising energy and oil prices.
The output prices index registered a third straight month of expansion, but the already-modest rate of inflation slowed, with the index slipping to 51.5 in October from 52.8.
The employment index rose to 47.7 in October from a revised 47.6 in the previous month. Employment in the manufacturing sector, which makes up less than one-fifth of the UK economy, has not risen since March.