London - British manufacturing activity expanded in June at its fastest rate in seven months, a survey showed on Tuesday, creating new jobs in the sector at the briskest pace in over three years.
The Markit/CIPS UK Manufacturing Purchasing Managers' Index (PMI) unexpectedly rose to 57.5 in June from 57.0 in May - its highest since November and well above the 50 line that divides growth from contraction.
Economists in a Reuters poll had expected the index to fall to 56.8.
Although output growth slowed slightly, new orders flowed in at the fastest rate since November and manufacturers took on staff at their quickest pace since March 2011.
The survey adds to evidence that Britain's consumer-led recovery is becoming more balanced and sustainable.
British industry enjoyed its strongest annual growth in over three years in April, while a release last Friday underscored the importance of business investment for robust first-quarter growth.
“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 survey compilers Markit.
He expected official manufacturing output in the second quarter to have expanded by more than the 1.5 percent growth rate seen in the first quarter.
“As a broader expansion is also a more sustainable expansion, the ongoing surging growth of output and new orders ... is exactly what is required,” he added.
New export orders rose for a 15th straight month to their highest since January.
The numbers are likely to reassure policymakers who have wanted to see a more broad-based recovery based on greater exports, manufacturing and business investment.
Against this backdrop, the industry created more jobs across the consumer, intermediate and investment goods sectors, while input prices rose for the first time since January.
The increase in costs was concentrated in the intermediate goods sector, reflecting higher prices paid for commodities, timber and plastic, while consumer and investment goods producers reported a slight drop in average input costs, Markit said.
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