By Maximilian Clarke

An unexpected surge in output has seen the UK’s manufacturing sector return to growth, a survey suggests.

The UK’s manufacturing sector has entered subdued performance for much of this year, after previously defying the recession to remain in growth throughout much of 2010. As the financial sector remained in decline and consumer confidence began to dip, the Government pinned their hopes for the UK economy on a manufacturing-led recovery.

The recovery, however, was impeded by rising prices at the factory gate along with a slowdown in export demand fro the UK’s trading partners, edging the vital sector into decline.

“UK manufacturing has broken a run of 8 consecutive declines and is now showing that the sector is expanding, albeit only modestly,” said Jeremy Cook, chief economist at currency brokers, World First.

“Obviously this is in direct contrast to the Eurozone with its figure slipping further into the red.

With Germany’s latest quarterly GDP figure suggesting Europe’s greatest economy has stalled, whilst Greece continues to threaten default, the UK’s fragile economic performance appears favourable compared to many of the continent’s key economies.

“While one swallow does not make a summer this will further increase the belief that the UK is a safe haven from the upcoming financial storm,” added Cook.

“It will also act as an early sign that the softness seen in Q3 may not be perpetuated through Q4, although it is very early days.”

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