Manufacturing output has hit an annual high, according May’s CIPS/Markit report.

The purchasing managers’ index (PMI) recorded a reading of 45.1 for the month, up from 43.1 in April.

Output, new orders and employment also fell at slower rates, while the consumer goods sector recorded growth of production and new business.

Roy Ayliffe, director at the Chartered Institute of Purchasing & Supply, says: “UK manufacturing looks like it may be close to turning the corner as the May PMI posted its strongest reading in 12 months.

“At this rate we would hit the no-change 50 PMI benchmark by autumn – significantly earlier than economists initially predicted. Moreover, as demand for export orders dampened and domestic orders grew, it could be that the UK is recuperating faster than its key export markets.

“However, despite these slight improvements in overall trading conditions, ‘caution’ is hot on the lips of UK manufacturers struggling to survive the onslaught of the recession. Purchasing managers from larger firms report they are making a quicker comeback than SMEs which are still battling away at the front line.”