THE UK manufacturing sector is creating 5,000 jobs every month as a strong domestic market fuels its expansion, a report has revealed.

The industry’s growth stood at a seven-month high in February, with recruitment increasing for a 22nd consecutive month.

The rate of production was also at its highest since June last year.

However, the results, announced in a CIPS/Markit purchasing managers’ index survey, warned sluggish export markets and poor exchange rates were holding companies back.

The report delivered a reading of 54.1 in February, which was up on January’s 53.1 and higher than the 50 used to indicate growth.

But despite the rise, Rob Dobson, Markit senior economist, said a reliance on domestic orders to counter export woes was impacting on investment and long-term expansion plans.

He said: “The sector is reviving after the slowdown of late last year, as growth rates of production and new orders continued to strengthen in February.

“Job creation is running at a rate of 5,000 new positions filled per month, reinforcing the picture of a broader growth revival in the UK.

“However, scratching beneath the surface, we see a lop-sided upturn.

“The prime driver is a strong upsurge in new orders and production at consumer goods producers, while a near-stalling of demand for plant and machinery points to ongoing weak business investment.

“Despite years of talk about re-balancing growth, we are still seeing only limited headway in moving away from consumer-driven expansions and towards a greater contribution from exports.”

Last month, the survey focused on the falling oil price and how it had helped manufacturers’ input costs fall at their fastest rate for six years.

Mr Dobson said it was still the case, and also highlighted its impact on future interest rate changes.

He added: “The slump in oil prices earlier in 2015 is still filtering through on the cost side, meaning manufacturers’ input prices are falling at a double-digit annual pace.

“Although a welcome respite for margins, lower costs are being partly passed on in reduced selling prices, adding to short-term deflationary pressures.

“Waning inflation looks set to continue to provide leeway for the Bank of England to push back that first rate increase until next year.”