UK manufacturing activity hit a 10-month high in March, according to figures released Monday, as businesses gear-up for a rebound in the second half of the year.

The Markit Economics/Chartered Institute of Purchasing & Supply (CIPS) survey came in at 52.1 from a revised 51.5 in February, the two groups said today. The prior February reading had been 51.2.

A reading of 50 or above typically indicates economic expansion, while a reading below 50 is often a sign of contracting economic activity.

"UK manufacturing has made a brighter than expected start to 2012, with PMI data pointing to output growth of around 0.3% in the first quarter," said Rob Dobson, senior economist at Markit. "This is obviously nowhere near a strong pace, but it is at least sufficient to prevent the sector from remaining a drag on broader GDP growth."

The figures were the highest in the Europe for the month and indicate a potential recovery for the UK economy, which contracted at a faster-than-expected pace of -0.3% in the final quarter of last year, according to the Office of National Statistics.

The Markit/CIPS report said inventory re-building in the sector hit a record high as new export orders rose for the third time in four months. Higher oil and metals prices, however, took input cost inflation to a seven-month high. Employment was little changed from the previous month.