Manufacturing figures show first growth in a year

Further signs of economic recovery were revealed today after official figures showed growth returned to the manufacturing sector for the first time in more than a year.

Revised numbers from the Office for National Statistics (ONS) indicated that the downturn for manufacturers came to an end in March, with a 0.2 per cent increase in month-on-month output.

April's figures out today indicated that the industry had maintained the rate of growth at 0.2 per cent. It is the first time the sector has seen growth since February 2008.

Manufacturers, while helped somewhat by the weakness in sterling, have been hit in the recession by falling demand and tight credit conditions. 

The ONS said manufacturing output between February and April was still 13.2 per cent lower than in the same period a year earlier. Industrial production as a whole, which includes the energy and mining sectors, was 12.6 per cent behind the same three month period a year ago. On a monthly basis, total production was 0.3 per cent higher in April than in March.

Today's better-than-expected figures come amid other encouraging survey data for the rest of the economy. 

Jonathan Loynes of Capital Economics said the ONS figures provided a "decent platform" for wider growth in the second quarter of the year. He added the figures bring "further evidence that the twin impacts on the industrial sector of very weak external demand and falling inventories are starting to fade".

Last week economists predicted an end to the UK slump within months after survey data showed the powerhouse services sector - which makes up 75 per cent of the economy - returned to growth for the first time in over a year.

According to today's ONS figures the most significant rise in output in April was a 3.2 per cent increase in the transport and equipment industries. This was a dramatic turnaround for the sector, which was down 7.6 per cent in the three months to April, weighed by hefty falls in February and March.

The ONS said there was a 2.3 per cent growth in chemicals and man-made fibres, but falls in metal and other manufacturing industries of 2.2 per cent and 3.8 per cent respectively.

Howard Archer, of IHS Global Insight, said the growth in the transport sector reflected car production resuming in some plants after extended winter closures to reduce stock levels.

He added: "The manufacturing sector is now clearly being helped significantly by the substantial de-stocking that has taken place and it may well also be increasingly benefiting from the boost to competitiveness stemming from the weak pound.

"Nevertheless, manufacturers still face serious obstacles and sustainable growth in the sector could remain elusive for some time to come."

Prime minister Gordon Brown's spokesman said: "As we have said, there are signs that the government's actions to support the economy through this difficult downturn are having an effect.

"But this remains a very difficult global economic situation and there are absolutely no grounds for complacency."

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