The UK’s manufacturing sector continued to expand during February albeit at a slower pace than the month before, according to the latest purchasing managers’ index (PMI).
Commentators warn that the slowing activity could place the UK’s nascent recovery is jeopardy.
The headline Markit/Chartered Institute of Purchasing & Supply (Cips) UK Manufacturing Index stood at 51.2 points in February, down slightly from the 52 seen in the month before.
A reading of above 50 points means manufacturing activity grew, although the fall over the two months show expansion has eased from the eight-month high of January.
The fall was driven by a decline in the index’s output balance, which moved from 55.6 points to 52.7.
Rob Dobson, senior economist at Markit, says: “UK manufacturers continued to raise production and employment in February, building on the solid foundation seen so far at the start of 2012.”
However, Dobson adds falling demand from the eurozone and the resurfacing of cost inflation on the high oil prices are acting as headwinds on the manufacturing sector.
Samuel Tombs, UK economist at Capital Economics, says: “February’s Cips report on manufacturing is the first tentative sign that the industrial recovery might be starting to falter.
“On the basis of past form, the output balance now points to virtually zero quarterly growth in manufacturing output.”
The latest Markit Eurozone Manufacturing PMI shows conditions improved marginally on the continent, with the headline balance rising from 48.8 points in January to 49 in February.