By Jonathan Davies
Growth in the UK's manufacturing sector edged higher in July, according to a closely watched survey.
The Markit manufacturing Purchasing Managers' Index (PMI) hit 51.9 in July, up from 51.4 in June. Any figure above 50 indicates growth.
However, it remained below the average of 54.3 during the current period of growth which stretches back to April 2013.
The survey indicated that expansion remained strong in the production of consumer goods, which offset lacklustre growth of intermediate goods and a contraction of investment goods.
Markit said rises in output were reflected by inflows of new business.
Employment grew for the 27th consecutive month, however, it remained below the average of the period.
Rob Dobson, Senior Economist at survey
compilers Markit said: “Although an uptick in the headline PMI breaks the decelerating trend in UK manufacturing, growth remains near-stagnant and suggests that the sector is continuing to act as a drag on the economy. With the sterling-euro exchange rate still sapping export demand and constraining growth of total order inflows, its seems that we will again look to the service sector to sustain any semblance of reasonable economic growth in the third quarter.
“Scratching beneath the surface of the headline manufacturing numbers shows that the sector is still reliant on the domestic market to drive overall demand, and on the consumer sector in particular. The continued weakness of investment goods demand suggests that ‘rebalancing’ remains firmly in the rhetoric as opposed to reality column."
Overall, the eurozone's manufacturing PMI fell slightly from 52.5 to 52.4, dragged down by an all-time record low score for Greece.
As the country continues to struggle under its debt crisis, Greece's PMI fell to 30.2.
Germany's manufacturing sector growth fell to a two-month low at 51.8. France's also dropped to a two-month low, but fell into contraction at 49.6.
There was more positive news elsewhere, however. Italy's manufacturing industry grew at its fastest rate for 51 months. And Austria's rose to a 17-month high.