The industry has also shown considerable strength in the export market, growing by 5.6% bringing in £839 million to the UK economy, representing 42% of total revenue for the sector in 2004.

The BMF is forecasting further growth in 2005 of 3.3%, which would take total industry revenues to over £2 billion for the first time. The industry employs approximately 30,000 people.

"The British leisure marine industry is a UK manufacturing success story, " said John Clarke, BMF chief executive.

"For the sixth year running, the sector has shown considerable rates of growth, proving once again that the high quality design and innovative approach of the British leisure marine industry continues to have an enviable reputation around the world."

Keith Wade, chief economist at Schroders, added: "This is another strong performance from a UK manufacturing industry. Exports remain very strong and prospects for next year are positive."

The fall in the value of the dollar, however, may make 2005 slightly harder for exporters to the important US market, he added.

But Clarke added the future may not be so rosy for the UK leisure marine industry if it loses its derogation on red diesel. This, said Clarke, could see the cost of marine fuel treble overnight.

"This could have a dramatic affect on the industry, on jobs and on the number of people taking part in boating activities, " commented Clarke.

"We strongly urge the UK government to press the case for an extension of the derogation and the EU to accept the case for this."