The sector, which generates about 10 per cent of growth, continued to expand in December, albeit at a slower pace than the previous month when it enjoyed the best conditions for four years.

New business was boosted by rising demand from customers across Europe, the US, China and the Middle East, with production scaled up to meet inflows of new work and the launch of new product lines.

A weaker pound has made UK produced goods more competitive.

December’s IHS Markit/CIPS purchasing managers’ manufacturing index, a closely followed snapshot of factory activity, hit 56.3, keeping above the 50-point mark denoting growth for the 17th straight month but down from November’s 58.2.

Output accelerated in investment and intermediate goods sectors, which include steel used in car production, but slowed at producers of consumer goods.

Companies took on staff for the 17th month in a row, while the growth in input costs slowed to a four-month low.

Some 54 per cent of firms expect production to increase over the next year. Duncan Brock, of the Chartered institute of Procurement & Supply, said: “ The sector’s performance is encouraging, showcasing a resilient response to the ebbs and flow of the year’s uncertainty with a sparkling end to a strong period of growth.”

Howard Archer, chief economic advisor to the EY ITEM Club, said the data suggested “another strong performance” in the fourth quarter.

But Samuel Tombs, chief UK economist at Pantheon Macroeconomics, argued that factories are “failing to make the most of the rebound in global trade”, underperforming against the eurozone by the biggest margin since June 2008.

He added: “UK manufacturers have cut investment since the Brexit vote and are struggling to fi nd skilled workers.

“Work backlogs are increasing quickly and supply chain delays are worsening.

“These constraints will only worsen as the recovery continues, unless manufacturers suddenly ramp up investment.”