UK Manufacturing: Job Creation Hits Three-Year High Amid Economic Recovery

Britain's resurgent manufacturing sector is experiencing a jobs boom as output and export orders soar.

A monthly index for the sector, compiled from surveys of purchasing managers conducted by researcher Markit, hit 57.5 in June, up from May's 57.0 in the second-best reading for 40 months and well above the neutral 50.0 mark. Anything above 50.0 represents an expansion in activity.

The continued powerful performance by the UK manufacturing sector will be welcome news for Chancellor George Osborne, who hopes to rebalance the economy away from its heavy reliance on household consumption and the service sector.

"UK manufacturing continued to flourish in June, rounding off one of the best quarters for the sector over the past two decades," said Rob Dobson, senior economist at Markit.

"With levels of production surging higher, and order books swollen by a further upswing in demand from both domestic and overseas clients, job creation accelerated to its highest for over three years."

But there was also a warning from the manufacturing sector's supply side.

"On the price front, input prices rose slightly for the intermediate goods sector for the first time in four months," said David Noble, chief executive at the Chartered Institute of Purchasing & Supply (CIPS), which helps Markit compile its index.

"Added to this, heightened by shortages in raw materials, delivery times lengthened to the greatest extent in three years, indicating suppliers are grappling with the pace of growth and the demand it has brought."

To give manufacturers a leg up in the UK economic recovery, the government has unveiled a number of support measures for firms.

These include efforts to bring down their spiralling energy costs and to make it easier and cheaper for firms to get finance from banks.

The UK economy will grow by around 3% in 2014, according to the Bank of England, after several years of stagnation.

An increasing portion of this recovery is being powered by the manufacturing sector, which had struggled after the financial crisis as both domestic and global demand slumped.

Now the UK economy is healing and growth is returning to the country's largest trading partner, Europe, the outlook is increasingly positive for manufacturing.