According to the latest IHS Markit (www.markit.com) Purchasing Managers’ Index (PMI), UK manufacturers ended 2016 strongly, recording the fastest growth in the sector for more than two years.

The manufacturing sector saw stronger expansion in December than economists had expected, with an increase in orders from both home and abroad. New export business rose for the seventh successive month in December, as exports were helped by the pound’s sharp drop against the euro, the dollar and other currencies.

The PMI rose to 56.1 in December from 53.6 in November — well above the 50 mark separating growth from contraction — and beat forecasts for 53.1 by economists in a Reuters poll. It was the highest reading for 30 months.

Rob Dobson, senior economist at IHS Markit, said: “The UK manufacturing sector starts 2017 on a strong footing. The headline PMI Purchasing Managers’ Index hit a two-and-a-half year high in December, with rates of expansion in output and new orders among the fastest seen during the survey’s 25-year history.”

Martin Beck, senior economic adviser to forecasting group EY Item Club, said: “Looking forward, 2017 is likely to see a slowdown in domestic demand, as higher inflation bites. However, a likely continuation of sterling’s weakness and a stronger global outlook offers some cause for optimism among ‘the makers’.”