THE beleaguered manufacturing industry has shown its first signs of growth for more than a year.

According to the Chartered Institute of Purchasing and Supply (CIPS) purchasing managers' index, there were signs of marginal growth in manufacturing activity in February.

The headline indicator edged above the critical 50 mark to 50.1, compared with 46.5 last month. A reading of above 50 shows growth, while below signifies contraction.

Malcolm Tell, chairman of CIPS North-East branch, said: "Spring has arrived on time for UK manufacturers.

"This is unlikely to be the start of a steep increase in manufacturing activity, and the PMI is likely to waiver for a month or two, but the trend is certainly in the right direction."

He said: 'We won't see dramatic growth, but with purchasing managers exploiting falling input and output prices in manufacturing, and prices remaining subdued in the service sector, the Bank of England shouldn't need to fear inflation.

"If interest rates remain at their current level we hope to see consumer spending sustaining the recovery of manufacturing."

The main impetus for growth was provided by the consumer goods sector, which CIPS said "has continued to defy the downward trend of the manufacturing economy as a whole for the past eight months".

But last month also saw marginally stronger output in the investment goods sector, while manufacturers of intermediate goods reported growth of order books for the first time since last February.

The seasonally adjusted new orders index recorded a level of 53.4 compared with 47.8 in January.

Overall, demand in the manufacturing economy was reported to have risen for the first time since last March.

Philip Shaw, chief economist at Investec, said: "It is very good news that the CIPS numbers are back above 50. It indicates that the worst is behind the manufacturing sector."

The findings will also weaken arguments for further cuts in the cost of borrowing.

The PMI is based on monthly surveys of purchasing executives in industrial companies.

l US manufacturing activity rose for the first time in 18 months in February, as a rise in orders and increased production helped lift the bruised sector out of its slump.

The Tempe, formerly known as the National Association of Purchasing Management, said its index of business activity rose to 54.7 last month from 49.9 January