Signs that the manufacturing industry is emerging from the worst of the recession came today as activity in the sector hit a 13-month high and output rose for the first time since March 2008.

The PMI gauge of activity at Britain's factories rose to a reading of 47 in June, up from 45.4 in May. However, while it is the highest reading in over a year, it is still under the 50 mark, indicating that activity is still falling rather than rising.

During June, the measure of factory output rose to 52.1, the first time it has risen above 50 in 15 months. Readings on employment, new orders and export orders also rose during June, although they remained below 50.

Today's positive figures, which come just a day after GDP figures for the first quarter were dramatically revised down from 1.9 per cent to 2.4 per cent, could help boost overall GDP figures for the second quarter.

"While the relationship between the PMIs and official data has been somewhat looser than usual of late, at the very least today's numbers are consistent with the manufacturing sector being much less of a drag on growth in the second quarter - something that, if the past improvement in the services PMI is sustained and maps into official data, could mean the UK economy actually posts modest growth in the second quarter," said Colin Ellis, European economist at Daiwa Securities.

There were further positive signs as official data showed that output by service companies, which account for nearly three-quarters of economic output, fell at the most modest pace in 6 months between February and April.

Services output fell by 1.2 per cent in the three months to April, after a 1.6 per cent drop in the 3 months to March.

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