Manufacturing leads economic bounce back

According to the Office for National Statistics, manufacturing output rose 6.8% in January, compared to the same month a year ago, and was 1% higher than in December. Growth is at its fastest rate for 10 months. The surge was apparently led by electrical and transport equipment industries and followed positive trade figures released last week, which showed a boost to UK exports in January. The figures add to hopes that the UK economy may have recovered in the first quarter of 2011, after it surprisingly declined by 0.6% in the final three months of last year. In more general terms, business activity in Scotland rose in February at its strongest pace for 44 months, according to a survey from the Bank of Scotland. The organisation's purchasing managers index (PMI) found companies in goods production had not been so positive about growth since the survey began 13 years ago. As a knock on effect the banks reports that recruitment was up for the first time in four months, albeit at a modest pace but almost entirely in manufacturing. Jobs growth was recorded in every region of England for the first time in more than three years. The purchasing manager's index also showed that companies were reporting improved orders as their clients loosened budget controls.