MANUFACTURING in the UK grew at its sharpest rate of the year last month after a boost in exports, a survey showed yesterday.

It was the third consecutive month of growth for manufacturers as exports rose faster than any time since June last year, according to The Chartered Institute of Purchasing and Supply (CIPS).

However, the Engineering Employers' Federation (EEF) Northern director, Alan Hall, said that while the North-East was a strong exporting region, the outlook is still a grim picture.

He said troubled manufacturers continue to feel the pressure of the rising cost of raw material and soaring energy prices.

"I don't believe that the picture as it stands is as optimistic for this region. I think lots of manufacturers are look at their cost base and trying to determine the best way forward," he said.

"The export side is a much healthier side of manufacturing and this region benefits from being strongly export-led."

One company thriving in the North-East is pump-producer Grundfos Manufacturing, in Sunderland, which last year reported a 10.5 per cent rise in turnover to £77m.

The Denmark-based group announced pre-tax profits of DKK 432m (£39.3m) for the first six months of this year, with sales up seven per cent.

The CIPS barometer for measuring activity in manufacturing - where anything above 50 is an improvement and anything below 50 a decline - rose from 51.5 in September to 51.7 in October.

It was the highest level since December last year and was boosted by exports, where the barometer reached 53.5 - the best performance for 15 months.

Companies reported an increase in new business from the US, Europe, South America and Russia.

But the squeeze on the workforce continued despite better output, with the employment index up 0.1 but still below 50 at 47.7.

It came on the back of a seven-month high on the input price index, reflecting the increased cost of oil, gas, electricity and steel.

CIPS director of professional practice Roy Ayliffe said: "The expected recovery in employment was not realised, as companies reported offsetting soaring input price inflation by reducing their workforces."