Economy in ‘rude health’ as manufacturing sector soars

THE British economy is ‘in rude health’ with manufacturers growing at the fastest pace for eight months, a report showed yesterday.

On the day after more than 100 business leaders publicly backed the Conservatives’ economic policies, a closely watched index of activity in UK factories hit its highest level since last summer.

It eased fears that the economy has slowed since the start of this year and was the latest boost for David Cameron and George Osborne ahead of the General Election next month.

Official data released on Tuesday showed the UK economy grew by 2.8pc last year – its best performance since 2006 – with manufacturing up 2.9pc.

Lee Hopley, chief economist at EEF, the manufacturers’ organisation, said: ‘The sector has stepped up a gear at the start of this year.’

But a separate report from the Office for National Statistics showed that productivity in the UK fell again in the final three months of last year.

Output per hour worked – a crucial measure of a sustainable recovery – fell 0.2pc in the fourth quarter and is still lower than in 2007 before the economic downturn.

Shadow business secretary Chuka Umunna seized on the figures. ‘This is yet another illustra- tion of an economy which simply isn’t working for working people,’ he said.

But the Tories said the letter from business leaders – including captains of industry such as Bob Dudley of BP, Lord Bamford of JCB and Sir Nigel Rudd of Meggitt – was proof of who was trusted more by employers to run the economy.

‘An intervention on this scale from Britain’s business leaders is unprecedented in any recent general election,’ Osborne said.

The Tory case was boosted by the manufacturing report from Markit and the Chartered Institute of Procurement and Supply.

The purchasing managers’ index of activity in the sector – where scores above 50 show growth – rose from 54 in February to an eightmonth high of 54.4 in March.

The average reading for January to March of 53.8 was the strongest since in the second quarter of last year. ‘The manufacturing sector has provided further evidence that the UK economy is in rude health,’ said Cips chief executive David Noble.

Britain’s factories are among the best performing in Europe, according to Markit. Manufacturers in the Irish Republic clocked up a score of 56.8 and Germany – Europe’s largest economy – recorded 52.8.