Manufacturing posts biggest monthly rise since 1994

Britain's manufacturing output grew at the fastest rate in nearly 16 years in May, following heavy downward revisions to April's numbers. Figures from the Office for National Statistics showed that manufacturing rebounded by 0.3% in May, after a 0.8% drop in April – marking the biggest monthly increase since December 1994. The recovery was driven by makers of electrical and optical equipment, basic metals and metal products. Industrial production, which also includes utilities and mining, expanded by 0.7% in May, taking its annual rate of growth to 2.6%, the highest in nearly 10 years. "The figures still show the pace of manufacturing output has been very strong over recent months," said Philip Shaw, chief economist at Investec. "We'd be hugely surprised if factory output maintained this pace of growth and therefore a slowdown does seem very likely over the coming months." A recent survey for June showed that while manufacturing growth remained strong, export orders were starting to weaken . The slowdown in overseas orders suggests that a stronger pound, coupled with the European debt crisis and signs of a slowdown in China and the rest of Asia, are beginning to damage British sales overseas.