A survey has shown that British manufacturing activity held steady in May at the previous month's 15-year high. But the recovery picture was clouded by signs of accelerating price pressures.
The Markit/CIPS manufacturing PMI was unchanged at 58 in May. It has been above the 50 mark, which separates growth from contraction, since July 2009.
Manufacturing output increased for the 12th consecutive month, although the rate of growth rate eased slightly for a second month.
The survey showed a further robust increase in new orders, with the rate of expansion remaining close to April's six-year high. Export orders rose for a ninth consecutive month as firms continued to benefit from a competitive exchange rate.
'UK manufacturing maintained its blistering start to the second quarter,' said Rob Dobson, senior economist at Markit. 'Although production remains well below pre-recession levels, the sector is now recovering its losses at a surprisingly rapid pace.'
The monthly survey of 600 industrial companies showed average purchase prices in May rose at the fastest rate since August 2008, extending a nine-month run of gains. Factory gate price inflation, meanwhile, rose at the fastest rate since September 2008.
The Bank of England maintains that the recent spike in inflation will prove temporary, but some members of the monetary policy committee are growing nervous this assessment may be too optimistic.
The survey showed the rate of jobs growth eased from April, although it was still close to that month's three-year high.
Improved demand from China, Europe, the US, Africa and the Middle East boosted new export orders. However, their rate of growth was also slightly down from April.
