MANUFACTURING figures showing stronger than expected levels of activity during last month have provided a boost for industry.

The surprise pick-up, shown in a study by the Chartered Institute of Purchasing and Supply (CIPS), came as separate research showed European counterparts had been through a period of stagnation.

In the UK, the Purchasing Managers Index from CIPS showed the fastest growth since July, following a surge in domestic orders.

Economists called the data an encouraging signal for UK industry, but warned it was too early to talk of a sustained recovery, particularly after gross domestic product growth of 0.4 per cent in the third quarter and poor results from a recent factory study by the Confederation of British Industry.

Despite the weak dollar and the sluggish performance of eurozone companies, CIPS said UK exports rose solidly, with the pace stronger than in October.

Manufacturers also managed to increase their prices to partially offset the sharpest rise in inflation of input costs for nearly ten years.

In Europe, output fell in Germany and Italy, while all other countries posted improvements in production.

Employment fell for the 42nd consecutive month, with the rate of job losses rising for the second month in a succession. In the UK, manufacturing employment rose for the eighth consecutive month.