UK manufacturing output expanded at the fastest rate for more than six years in August, as companies restarted operations following the pandemic.
However, firms also continued to slash jobs as they look to reduce costs and stabilise their finances, according to new figures.
The closely-followed IHS Markit/CIPS manufacturing purchasing managers’ index (PMI) recorded a score of 55.2 in August, from 53.3 in July.
Anything above 50 is considered an expansion in the sector.
Rob Dobson, director at IHS Markit, said: “The recovery of the UK manufacturing sector gathered pace in August.
“Output expanded at the fastest rate in over six years as new work intakes rose to the greatest extent since November 2017, led by an upturn in domestic demand and signs of recovering exports.”
He added that the survey showed that business optimism also remained “encouragingly robust”, and close to July’s recent peak.
Optimism held firm as manufacturing production expanded on the back of solid growth in the consumer and investment goods sectors.
Manufacturers reported export growth after improved demand from Europe and the Middle East, North America and Australia.
However, firms reported significant job losses for the seventh consecutive month, with manufacturing employment slumping “at one of the steepest rates during the past 11 years”.
Small, medium and large-sized firms all implemented similarly notable cuts to staff headcount, the report said.
Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “It seems the sector may be experiencing a ‘V’ shaped recovery with the fastest rate of growth in the manufacturing sector since May 2014.
“However, amidst this positivity, the elephant in the room remains the poor employment figures.
“The drop in job numbers in August makes this feel more of a rebalancing strategy than real recovery.”