Growth in British manufacturing activity slowed unexpectedly in November, a sign that the sector's recovery may be about to run out of steam, according to a closely watched report

The Chartered Institute of Purchasing & Supply (CIPS)/Markit survey showed that although growth of new orders and production continued last month, it was at a far slower rate than the leap recorded in October.

The seasonally adjusted Purchasing Managers’ Index posted a reading of 51.8 in November, down slightly from a revised figure of 53.4 in October. A figure above 50 indicates growth.

David Noble, the chief executive of CIPS, said: "With new orders expanding at a slower rate than in October, there are already signs that the rebound in growth may be nearing its peak, leaving question marks over the longer-term outlook and the possibility of a double-dip recession.

"Positively, however, export demand grew at its fastest pace in almost two years, as improving market conditions and the ongoing weakness of sterling bolstered demand from Europe, US and Asia.”

Employment fell at its slowest pace for one and a half years and output prices increased for first time in ten months.

Rob Dobson, senior economist for Markit Economics said: “The UK Manufacturing PMI may have fallen back slightly in November, but nonetheless remained above levels seen since the start of the financial crisis in late 2007.

"There are also signs that we may be nearing a growth peak, as the new orders-to-inventory ratio fell sharply, but this is balanced by evidence that the manufacturing labour market is moving closer to stabilisation.”

Many economists are optimistic that Britain, still in a recession in the third quarter of the year, can drag itself out the downturn in the final quarter.

Alistair Darling, the Chancellor, will unveil his Pre-Budget Report next week.

October manufacturing growth was unexpectedly strong, as the weakness of sterling bolstered exports.

Howard Archer, the chief UK and European economist for IHS Global Insight, said: "The UK still faces a tough battle to develop decent sustainable recovery.

"Nevertheless, it is still clearly in expansion territory and industrial production should make a positive contribution to GDP growth in the fourth quarter for the first time in two years."

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