MANUFACTURING continued to show improvement in January, as an industry survey revealed export growth reached a near three-year high.

New order growth came from North America, mainland Europe, Asia, Brazil, Scandinavia and the Middle East.

The Markit/CIPS Purchasing Managers' Index (PMI) for the manufacturing sector recorded a level of 56.7 in January.

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Although this was down from December's 57.2, it still marks well above average growth in the sector. A reading above 50 indicates expansion.

The first month of this year saw factories churn out more goods in response to improved domestic and overseas demand.

David Noble, chief executive at the Chartered Institute of Purchasing and Supply, said: "The continued improvement in global market conditions has ushered in a broad based and fully fledged recovery in manufacturing.

"Sustaining growth close to Novembers near record numbers, the makers march continued in January, embodied by ever faster rates of new business growth and ongoing increases in employment levels.

"Whilst domestic demand continues to climb, it is the expansion overseas that promises continued growth.

"The export market has long been heralded as the key to unlock UK economic growth and in manufacturing appears to be coming to fruition, with new business rates climbing fastest in nearly three years."

Markit economist Rob Dobson said the sector had continued the robust upsurge in production seen at the tail end of 2013, with the broad-based improvement being felt at small business and large-scale producers alike.

Although the pace of output expansion has cooled slightly in recent months, growth is still tracking at one of the highest rates in the 22-year survey history, he said.

He said the jobs growth added to the prospect of unemployment soon falling to its 7 per cent threshold - when policy makers will begin to consider an interest rate rise.

Andy Tuscher, the regional director (North) at EEF, the manufacturers’ organisation, said: “Manufacturers have begun the year in positive mood, maintaining the solid activity trends seen during the second half of last year.

"With separate data showing a further improvement in manufacturing activity across the euro zone, this supports our forecast for UK manufacturing output to grow by 2.7 per cent this year, the fastest rate of expansion in four years. 

"Some doubts will persist, however, over the durability of this upturn given the ongoing weakness in investment spending and concerns over the impact of high energy costs across the sector.”

Mike Rigby, head of manufacturing at Barclays, said: 2014 has started in the same upbeat way for manufacturers as last year finished with increasing confidence across the sector.

A growing economy, record low interest rates, stable input prices and foreign exchange rates are providing manufacturers with a steadier platform upon which to perform.