Currency exchange boosts manufacturing

Manufacturing levels in the UK have been given a boost by sterling's low performance on the currency exchange markets.

The manufacturing Purchasers Managers Index (PMI) revealed that the reading in March had risen from 56.5 the month before to 57.2.

A senior economic advisor to the Ernst and Young ITEM Club Hetal Mehta, commented that weak sterling played a role in the increase.

Ms Mehta said: "Although the monthly data can be volatile, the underlying trend is that the manufacturing sector is picking up quite nicely, supported by export demand and the weakness of sterling. This confirms our view that we will see positive GDP growth in the first quarter of 2010."

She added that the expectation of an "export-led recovery" could increase the chances of the manufacturing sector continuing to perform well.

According to the index, the rate of growth accelerated to the highest seen in over 15 years.

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Posted by Chris Barber