Hopes up as manufacturing output rises in June


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Recession in the British manufacturing sector eased in June, with output rising for the first time in over a year.

The Chartered Institute of Purchasing & Supply's report said output in the industry rose for the first time since March 2008 last month, with a reading of 52.1 being above the neutral 50 mark.

The overall activity index - which takes in data for new orders, production, employment, suppliers' delivery times and stocks of purchases - posted its highest reading since last May, with a rating of 47.

This was an improvement from 45.4 the previous month but still denotes a contraction in the sector.

factory

Manufacturing production rose for the first time in more than a year in June


The Purchasing Managers' Index - a gauge of business activity - has risen for the last four months, leading to hopes that manufacturing is edging its way out of recession.

Jonathan Loynes of Capital Economics said that taken alongside a 'modest improvement' in survey data for the service sector, the figures supported the suggestion that the economy contracted by much less in the second quarter than the 2.4 percent drop seen in the first quarter.

"The latest PMI data suggests that after months of gloom and doom, there are some signs of relief for the UK manufacturing sector," said David Noble, chief executive at CIPS. "However, that such data can be read so positively really highlights how bad things have been over the past 15 months."

The June figures still indicated declines in many key areas of the industry, such as new orders and employment, although the rate of decline eased.

Noble said that demonstrated that there was still "a long way to go" before the sector returns to full health.

Meanwhile, the purchasing managers index for the euro zone's manufacturing sector - released separately - rose for the fourth month running to 42.6 in June from May's 40.7. The figure is an upward revision from the preliminary estimate released a week earlier which had shown a rise to 42.4.

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