The UK’s manufacturers boosted output after Theresa May requested a Brexit extension from the EU ahead of Brexit Day on March 29. The Markit/CIPS UK manufacturing purchasing managers’ index (PMI) showed a reading of 55.1 last month compared with the 52.1 recorded in February. It represents a 13-month high and beat expectations from economists, who forecast a reading of 51.2.

A figure above 50 indicates growth.

MPs rejected Prime Minister Theresa May’s Brexit deal for a third time on Friday, leaving Britain’s withdrawal from the EU in turmoil on the very day it was supposed to leave the bloc.

British politicians now have until April 12 to come up with an alternative, after which the country could leave the EU without a deal to ease its transition – something most economists think will harm the economy.

The risk prompted British factories to ramp up stocks of parts and finished products at a record pace in March to minimise any disruption to supply lines.

Rob Dobson, director at IHS Markit, which compiles the survey, said: “Manufacturers reported a surge of business activity in March as companies stepped up their preparations for potential Brexit-related disruptions.

”Output, employment and new orders all rose at increased rates as manufacturers and their clients raced to build safety stocks. Stocking of finished goods and input inventories surged to new survey-record highs.”

Companies had stepped up production to build inventories in advance of March 29 before the Theresa May’s Government asked the EU for an extension.

However Duncan Brock, of the Chartered Institute of Procurement & Supply, said that businesses will have to resort to “heavy discounting” on these stocks to free up valuable operating expenses if normal order levels are not restored in the coming months.

Helena Sans, head of manufacturing at Barclays, added: ”Encouraging as today’s figures may appear, the true picture of UK manufacturing continues to be obscured by stockpiling, driven by the ongoing Brexit uncertainty, and this pattern looks unlikely to change until manufacturers see some whiff of white smoke above Westminster.”

The prospect of a no-deal chaotic exit from the EU is still a very real possibility as MPs squabble over which form of Brexit to pursue.

Manufacturing activity was also helped by new business from both domestic and export markets.

This had a positive impact on staff hiring, with jobs growth recorded following back-to-back reductions at the start of the year.

But the industry faces major headwinds as EU firms threaten to quit Britain and investment dries up.

Mr Dobson said: “The survey is also picking up signs that EU companies are switching away from sourcing inputs from UK firms as Brexit approaches.

“It looks as if the impact of Brexit preparations, and any missed opportunities and investments during this sustained period of uncertainty, will reverberate through the manufacturing sector for some time to come.”

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