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.
© 1999-2024 Forex EuroClub
All rights reserved