5 April 2002, 14:53  OUTLOOK UK economic data to show small improvement

LONDON (AFX) - UK economic figures in the coming week are expected to show some improvement with the manufacturing sector finally turning around, according to economists. "We believe that prospects for the manufacturing sector have improved significantly from 2001," David Page, economist at Investec said. Survey data improved significantly in February. The manufacturing PMI rose past the 50 point cut-off that marks expansion to reach 50.2 while the Confederation of British Industry described the sector as having got through the worst, he added. The Bank of England will be watching the strength of any manufacturing recovery closely. The prospect of manufacturing finding its feet again raises the need to rein back domestic consumption. Increasing interest rates may well hamper anything less than a sustainable recovery. But the wider measure of industrial production is not likely to fare so well in February, economists said. "Utility output should have fallen significantly after an incredibly mild February. Extraction industries are also likely to have suffered at the hands of warmer weather and North Sea oil output was also reported down on the month," Page said. However, his forecast of a 0.1 pct fall in month-on-month terms is well under the consensus estimate of a 0.4 pct gain. Ross Walker and Geoffrey Dicks, economists at the Royal Bank of Scotland, said the UK underlying trade in goods deficit will continue to widen again in February although partly offset by a higher surplus in trade with the EU. The Feb Non-EU trade in goods deficit is also expected to worsen but only by a small margin - reflecting the pattern of global recovery led by the US. In January there was a jump in car exports to the US, but it is unlikely to be sustained in February, Philip Shaw, economist at Investec said.

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