British manufacturers beat expectations in the first quarter of 2017, helped by the fall in the value of the pound after the Brexit vote and a recovery in core European markets, a new survey found.
The UK's factories are growing at their fastest pace in more than three years after initially taking a hit from the EU referendum, a survey by manufacturing trade body EEF and consultancy BDO said today.
"The post-referendum wobble that defined UK manufacturing's performance in the second half of 2016 has been left firmly behind with manufacturers now rallying far more strongly than even they had predicted," EEF chief economist Lee Hopley said.
Output for manufacturers increased as 31 per cent of firms reported growth in the first quarter – the highest number since the third quarter of 2013.
33 per cent of firms are expecting growth in the second quarter, while a fifth of companies said they hadn't yet seen an uptick in overseas markets.
Analysts have struck a note of caution, however, and many economists say the revival is unlikely to offset fully the impact on the economy of slower consumer spending as sterling's fall pushes up inflation.
Manufacturing accounts for about 10 per cent of Britain's economy.
In February, Markit's manufacturing PMI fell to a three-month low at 54.6. Growth was still solid – any number above 50 on the index indicates growth – but the figure missed analysts' expectations of 55.6.
EEF raised its growth target in the sector to one per cent in 2017 from a previous forecast of a 0.2 per cent contraction. It increased its estimate for British economic growth as a whole to 1.8 per cent from 1.3 per cent.