A RISE in domestic manufacturing has helped to offset falling exports sales, according to a closely watched survey.
The Markit/CIPS's UK Manufacturing Purchasing Managers' Index (PMI), published yesterday, rose to 53.5 in November.
That was above the 53.3 recorded in October and still ahead of the 50 level which marks expansion in the sector.
Growth in output and new orders helped push up employment in the sector to a four-month high.
Production increased for the 20th month in a row during November helped by solid demand from the domestic market.
The survey cited promotional activity and client wins as other factors in the rising output, which was broad based across most sectors.
The ongoing expansion has continued to filter through to the job market with small and medium enterprises signalling the sharpest rise in employment during November.
However the trend in new export orders remained weak and declined for the third month in a row. Exporters cited subdued global conditions as well as exchange rates as the reasons for muted demand from the eurozone, Russia and other emerging markets.
Rob Dobson, senior economist at Markit, said: "The news on the domestic front was especially positive, with solid new order inflows from the UK market the main pillar supporting the expansion, . This in turn encouraging manufacturers to raise employment at the fastest pace in four months.
"The only real negative from the survey came on the export-side, with new export business suffering a further slight decline. Slower global economic growth is hitting sales to emerging markets, while a strong sterling-euro exchange rate is also stifling trade with the eurozone nations."
Howard Archer, from IHS Global Insight, said: "This is a pretty encouraging survey that indicates that the manufacturing sector has recently regained a little momentum after slowing appreciably from the heady levels seen in the early months of 2014. This boosts hopes that UK GDP growth will hold up well in the fourth quarter, although much will clearly depend on how the services sector performs and how much consumers spend for Christmas."
Andy Hall, head of corporate banking at Barclays in central Scotland, said: "With recent weaker levels of business investment and exports, the doomsayers are in play but we must not lose sight of the fact that manufacturing continues to expand, albeit at a more controlled rate.
"Despite weaker sentiment, particularly around eurozone economic conditions in the eurozone, the UK economy grew by 0.7 per cent in Q3 and should finish the year in a similar vein.
"As we move towards 2015, Manufacturers are eagerly awaiting some good news from the Autumn statement and especially help in supporting and promoting overseas trade, and beyond the squeezed eurozone."
Scottish Engineering's recent quarterly review cited growing optimism but warned of problems in export markets in the eurozone and Russia. The Manufacturing Outlook survey, compiled by industry body EEF and accountancy firm BDO, suggested flat output is likely in the fourth quarter of this year but it had a stronger forecast for the first three months of next year.
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