Manufacturers are showing positive signs of recruitment and investment, a signal of increased confidence, survey finds.
The Engineering Employers Federation (EEF) said manufacturing firms were continuing to drive the country's economic growth on the back of export-led demand.
EEF’s survey of over 500 companies showed strong levels of recruitment and investment plans, with "solid growth" forecast for the sector throughout 2011 and into next year.
Manufacturing grew by 2.3 per cent in the last six months while the economy as a whole stagnated, said the EEF, although the employers’ group warned that previous improvements in profit margins had gone into reverse in recent months.
EEF chief economist Lee Hopley said: "Recent data appears to indicate that manufacturing may be heading for more turbulent times. However, cutting through some of the noise from temporary factors over the past few months, our survey continues to show underlying strength in output and orders.
"Providing buoyant demand from overseas markets holds firm, we should see growth maintained through the rest of the year.
"However, the flip side of strong global demand has been upward pressure on a range of input and commodity prices, which has become tougher to manage.
"But manufacturers' plans to invest for future growth suggest there is some confidence that they will be able to navigate this and other challenges in the months ahead."
Tom Lawton, of BDO LLP, which helped with the research, said: "On the back of healthy output and order books, the intention to recruit among manufacturers has remained strong, with official data showing record levels of vacancies.
"However, the key issue is whether companies are able to meet their intentions and fill their vacancies with the highly-skilled workers they require."