Economic predictions were wrong – but in a positive way. The end of April saw the highest PMI (Purchasing Managers’ Index) figure for the UK’s manufacturing sector in more than five months, besting predictions of 55.4 and rising to 57.3 (you can read more details on this here).

The expansion (which is indicated by a PMI above 50) has been seen throughout the Eurozone, but it’s Britain in particular who have been reaping the rewards – so how has it helped bolster economic recovery, and have there been tangible effects?

British Boom Due To Export; Germany Leading The Way

The growth has been almost across the board throughout Europe; Germany, who boast the EU’s largest economy, lead the way with Britain, Spain and Italy all reporting massive improvements in output for this sector – even countries such as France, who struggled to maintain momentum, are still expected to report growth.

For Britain, this has meant excellent news for exporting – something which plays an enormous part in economic output (manufacturing as a whole represents 10% of the UK’s economy). The deputy chief economist for EEF told the BBC: “The domestic market remains the dominant driver of manufacturing activity, although there are some encouraging signs from a rise in export flows that the gradual revival in Eurozone demand is beginning to feed through to manufacturers’ order books.”

The good news doesn’t seem to end there, either – further rises are expected off the back of this newly restored confidence in UK manufacturing and factory industries, if nothing else. James Bevan, the Chief Investment Officer for UK investment firm CCLA, tweeted his expectations earlier this month, suggesting a PMI rise to 57.8.

Growth Sees 5-Year High Sterling Rates

We regularly see economic growth figures and PMI scores touted in the news as signs of recovery and better things to come – but what does this mean, in real terms, for economic growth? We’ve recently seen the knock-on effects of the recently-announced PMI rise in the value of the British pound against the US dollar.

Since this time last year we’ve seen an enormous rise in the pound’s value against the dollar, shooting up as high as $1.6983 per GPB at the time of writing. While this is a huge jump from the sub-$1.50 levels we saw last July, it’s also a value we’ve not seen since August 2009 – an almost five year high. Rising interest rates could help to boost the rise even further, perhaps even creeping over the $1.70/£1 mark.

Traditional Or Tech – Which Is The Future?

Europe’s manufacturing industries are seeing continued and relatively stable growth, with knock on effects being seen in the wider economy – particularly in Britain. So with manufacturing and industry seeming to be an integral part of economic recovery, what does the future hold for factories? Traditional methods and equipment are tried and tested, reliable and well recognised, whereas more high-tech ‘cutting edge’ solutions boast efficiency, transparency and revolutionary practices – so where does the answer lie?

This is a deep issue that, while it’s worth mentioning in a discussion on the factory industry and its current growth, is worthy of an entire post in its own right – however, industry leaders are already voicing their opinion. Siemens’ CEO of its industrial sector, Helmuth Ludwig, told Industry Week that the advancement of high-tech digital equipment is ‘nothing less than a paradigm shift in industry’.

He added: “The real manufacturing world is converging with the digital manufacturing world to enable organizations to digitally plan and project the entire lifecycle of products and production facilities.”

What this signifies is that, when devising a production strategy or overhauling an existing setup to become more efficient and technically up-to-date, it’s never going to be a case of ‘out with the old and in with the new’ to completely replace existing systems. Manufacturing firms will have to strike the perfect balance, working with firms like Lifting Gear Direct for the solid factory equipment and companies like Siemens for the more tentative technological advancements.

Ultimately, this all spells excellent news for the UK economy as a whole, as well as the broader European manufacturing industry. Growth is consistent, showing a trend towards pre-recession levels of output, there’s strong export in areas like Britain and the knock-on effect to the wider economy is tangible and noticeable. If the trend continues, we could see massive expansion in the factory and manufacturing areas across the continent and an even greater merging of traditional methods with a high-tech edge.

This guest post was written by Tom McShane, working in association with UK factory equipment supplier Lifting Gear Direct.