The manufacturing sector is continuing to show signs of recovery, a detailed survey of UK firms has said.

Manufacturers have seen "considerable gains" in export sales and orders over the past three months, the latest quarterly survey from the British Chambers of Commerce (BCC) said.

The manufacturing recovery is not yet assured

David Frost, British Chambers of Commerce

The findings echoed an official report last week showing that manufacturing output had risen for the second month in a row.

But the BCC said that although the outlook was getting better, companies were continuing to cut jobs.

Export driven recovery

The manufacturing sector is emerging from a year-long recession, having been battered by the global economic downturn and the strength of the pound against the euro.

But the BCC's survey - which covers more than 7,000 firms - showed that exports were beginning to pick up.

The survey found the balance of manufacturers reporting higher export sales over those reporting lower sales climbed to plus 7%, compared with plus 1% during the first three months of the year.

Exports orders also picked up, with the balance figure rising to plus 5%, from plus 1% in the first quarter.

But the domestic situation worsened slightly, with sales and order data slipping back.

Caution urged

The BCC also found that manufacturers were continuing to cut jobs, although at a slower pace than in the first quarter.

"The manufacturing recovery is not yet assured, although it appears to have strengthened somewhat since last quarter," said David Frost, the BCC's acting director general.

"However, employers are continuing to lay off staff and we must remain cautious until the pick up in recovery filters through into employment prospects.

"With the global picture still unclear, inflation at a 27-year low and with the stock market threatening to hamper economic prospects, there is no need for the Bank of England to be even contemplating raising interest rates in the short-term."