UK manufacturing
Output is continuing to rise in the UK manufacturing sectorReuters

Employment is growing in the manufacturing sector at its fastest pace in over 40 years.

That is according to a monthly survey by the Confederation of British Industry (CBI), the largest business lobbyist in the UK.

The CBI said its poll of 481 manufacturing firms saw a balance of +21% in the difference between those reporting higher and lower staffing levels for the three months to July 2014, the best reading since January 1974.

Manufacturers also reported a +24% balance for higher new orders, the best reading since April 1995. And there was a +23% balance for rising output over the period.

A healthier manufacturing sector speaks to a broadening UK economic recovery, set to see 3% GDP growth in 2014 but has been heavily reliant on the service sector and household spending.

However, the balance for new exports was flat over the three months as global demand for British goods remains weak amid the ongoing eurozone crisis and economic slowdown in key markets, such as China.

"The recovery in the manufacturing sector is keeping a good pace," said Katja Hall, deputy director-general of the CBI.

"Industry is performing well as orders and hiring are on the up, and investment intentions for the year ahead are looking healthy across the board.

"It is not all plain sailing however, and there are still risks to the recovery. These include increasing international political instability, and the recent rise in sterling, which could be weighing on exports.

"We need to continue to help manufacturers to export their products to high-growth markets across the globe, to give a healthy and sustainable boost to the UK's recovery."