A gauge of the manufacturing sector's growth dropped to a 34-month low this morning.
Markit's manufacturing purchasing managers' index – compiled from a survey of businesses – fell to a score of 50.8 for February. It is only slightly above the 50 mark that implies there was no growth on the previous month.
Output growth eased sharply while the sector posted further job cuts. Demand was weak from consumers and businesses both at home and abroad. Companies reported fewer orders from Brazil, mainland Europe, Russia and the US. Manufacturing makes up around 11 per cent of the UK's economic output.
“The near-stagnation of manufacturing highlights the ongoing fragility of the economic recovery at the start of the year and provides further cover for the Bank of England’s increasingly dovish stance," said economist Rob Dobson from Markit.
“The breadth of the slowdown is especially worrisome. The domestic market is showing signs of weakening while export business continued to fall. Price pressures also remained firmly on the downside, with the survey signalling input costs falling at a double-digit annual pace and average factory gate selling prices showing a further decline."
Economists are mixed on whether recent sharp falls in sterling will boost UK manufacturing exports.
"While the sharp fall in sterling could ultimately benefit the UK manufacturing sector, this will depend on how long the weakness of sterling persists and the reason for it. If a soft currency is a reflection of risks facing the economy, the benefit could be limited, especially at a time when global demand is soft," said economist Dominic Bryant from BNP Paribas.