THE manufacturing sector returned to growth in January, according to new figures.

The better-than-expected purchasing managers' survey by Markit/CIPS showed an overall reading of 52.1, up from 49.7 in December.

It was the first reading above the 50 mark which indicates growth since September and the highest since May.

CIPS said output growth was at a 10-month high, while there was further cheer for the wider economy after it emerged factory bosses saw costs fall at the fastest pace since mid-2009.

Manufacturers reported lower costs for commodities, metals, packaging, paper, plastics and timber.

CIPS chief executive David Noble said: "The UK manufacturing sector has sprung to life in the first month of 2012 to defy any economic gloom.

"But it is too early to say whether this trend is sustainable."

The organisation said foreign orders rose for the second month running amid reports of improved demand from clients in Brazil, China, the Middle East and the United States.

Caroline Stanworth, head of Staffordshire at Barclays Corporate, said: "The PMI figures are a shot in the arm for manufacturing, a sector that appears to be increasingly looking outside of the Eurozone for export growth, with orders increasing in markets as diverse as Brazil and the Middle East.

"UK manufacturers that have a more global client base also remain a major target for international acquirers, and we have seen a significant increase in the number of acquisitions of UK companies by offshore interest.

"But only when these companies can display international revenue streams."