Manufacturing output grows at record pace

Month on month output also increased by 1% from December to January, following December's drop of 0.1% which was attributed to bad weather. EEF chief economist Lee Hopley described the month-on-month expansion as "robust" and added: "Manufacturing should continue to be one of the bright spots in the economy during the first quarter. Beyond that, however, there remains some caution and manufacturers will be looking to the Budget later this month to lay the foundations for the stable tax and regulatory environment that will underpin long-term investment and growth in the sector." Graeme Allison, head of manufacturing at Barclays Corporate, commented: "This outstanding set of figures points to a manufacturing recovery that is both strong and sustainable. The number of businesses that fail during an economic recovery is often higher than in the recession preceding it, but the manufacturing companies we bank continue to outperform businesses generally, with little need for restructuring and very few insolvencies. "It remains somewhat disappointing that we are still seeing little in the way of major capex or M&A activity amongst Britain's manufacturing sector this year. While a few manufacturers are investing some of the cash they have accumulated over the past 18 months, there is still very little in the way of international acquisitions, new plant openings or private equity activity that we would expect to follow the wave of positive sentiment seen in the industry over the past year."