UK manufacturing sector growth accelerated sharply in July to its fastest pace since March 2011, a survey has revealed.

The survey, published yesterday by the Chartered Institute of Purchasing and Supply (CIPS) and financial information company Markit, also showed the strongest monthly growth in UK manufacturers' new orders since February 2011. And it revealed an acceleration in the pace of increase in the UK manufacturing workforce, although the rate of recruitment remained modest.

CIPS's headline purchasing managers' index for manufacturing, a composite measure of activity which includes output, new orders, employment, suppliers' delivery times and stocks of goods purchased, rose from 52.9 in June to 54.6 in July on a seasonally-adjusted basis.

This took it further above the level of 50 which is calculated by CIPS to separate expansion from contraction, to signal the fastest growth in UK manufacturing activity since March 2011.

The manufacturing output sub-index rose from 55.5 in June to 58 in July - to signal the fastest pace of increase in production since February 2011. Growth of new export orders for UK manufacturers meanwhile accelerated to its fastest pace for two years.

Samuel Tombs, UK economist at consultancy Capital Economics, said the CIPS-Markit manufacturing survey had given the most encouraging signal to date that the industrial sector's recovery was gathering momentum.

Mr Tombs said: "The significant improvement in the survey's main balances was undeniably impressive.

"Indeed, if the output balance holds steady for the rest of the third quarter, then it would be consistent, on the basis of past form, with a pick-up in the quarterly growth rate of manufacturing output from 0.4% in Q2 to about 1.5% in Q3."

And he declared that, given the growth in new orders and fall in stocks of finished goods, the recovery in production could gain "even further pace" over the next few months.

However, he cautioned: "Of course, we have been here before. The manufacturing recovery looked like it was becoming entrenched in 2010, but the sector was back in recession in the second half of 2011. The sector's recovery remains vulnerable to a renewed deterioration in global investor sentiment, particularly towards the eurozone."

Mr Tombs added: "We still have some doubts over whether the current strong rate of expansion can be maintained beyond the next few months. In particular, the survey's sub-indices show that the manufacturing recovery has been led by stronger demand for consumer, rather than investment or intermediate, goods.

"But, with recent growth in household spending having been driven by a fall in the household saving rate and real pay still set to be squeezed for another year or so, it is hard to see how consumer goods demand can continue to grow at a rapid rate."

Howard Archer, chief UK economist at consultancy IHS Global Insight, described the CIPS-Markit survey as "hugely encouraging".