The decline in manufacturing output halted in March, as today’s figures show output was remained virtually stable between February and March.
While it is fair to say monthly data is volatile, even looking at output in the last three months (and comparing it to the previous three months) shows that the pace of decline has eased. This is a trend that has also shown up in the manufacturing PMIs in the last two months.
What's more encouraging that some manufacturing sectors have posted growth: output in 9 of the 22 manufacturing sectors was higher in March than February. And these include two of the worst hit sectors - basic metals and transport equipment - which grew by 0.8% and 5.0% respectively.
Our Chief Economist Stephen Radley commented on today's figures:
It is too early say that the downturn in manufacturing is over. While the overall figures show output declining more slowly, the rate of contraction is still severe in some industries and trade volumes are still weak. The Bank was right to expand its quantitative easing programme last week and the focus must remain on fighting the recession.
Also out today, UK trade figures show the trade deficit narrowed as imports fell faster than exports. The deficit in goods and services fell to £2.5bn from £2.8bn in February. The fall in Sterling may have helped the UK as imports become more expensive and domestically-produced goods cheaper.