LONDON, April 7 - Manufacturing output in Britain staged another surprise rise in February, official data showed on Monday, suggesting the sector may be down but is not yet out. The Office for National Statistics said manufacturing output, which accounts for a fifth of the economy, rose 0.3 percent in February from January, the second monthly rise in a row and one which totally confounded expectations of a fall of 0.3 percent. The ONS said this left output 0.6 percent lower than a year earlier. The three-monthly numbers, which iron out monthly distortions, showed a fall of 0.2 percent in the three months to February, leaving production 0.7 percent down from a year earlier.
The broader measure of industrial output, which includes North Sea oil and gas production, showed a rise of 0.7 percent on the month -- the best performance since last July. That gave an annual rise of 0.1 percent -- the first increase in almost two years. The ONS said 9 of the 13 manufacturing subsectors showed rises in output into February, mostly small ones except for machinery and equipment which rose 2.2 pct on the month after four months of decline. There was a 1.0 pct fall in output in the latest three months, however. The electrical and optical equipment subsector showed a small fall of 0.5 percent on the month but was up 1.5 percent in the latest three months. Computer output was 1.2 percent down in February from January but was up 5.5 percent in the latest three months.
Statisticians said, however, it was too early to say if manufacturing output had bottomed out. But this is the first piece of positive data on the UK economy for some time so will come as a relief to financial markets which had begun to wonder if the world's fourth largest economy was in serious trouble. The data is, however, only for February and forward-looking survey indicators have shown firms expect to cut their output in the coming months due to the uncertainty over the war in Iraq. The Bank of England's Monetary Policy Committee meets this week on interest rates with economists suspecting it will leave its key repo rate steady at 3.75 percent but acknowledging that another cut is possible due to recent signs of economic weakness.//