UK Manufacturing Growth Slowest Since 2013

UK manufacturing had its weakest month for nearly three years in February as the beleaguered sector's growth ground almost to a halt.

Factories suffered as demand at home slowed and export orders fell, according to the Markit (NasdaqGS: MRKT - news) /CIPS Purchasing Managers' Index (PMI).

The closely watched survey saw the sector fall to a reading of 50.8 - where the 50 mark separates growth from contraction. It (Other OTC: ITGL - news) was below economists' expectations and down from 52.9 in January.

The performance was the worst since April 2013 when the UK was finally emerging from the financial crisis.

It is the latest gloomy snapshot of the UK's economic performance and underscores the Bank of England's signals that interest rates - held at 0.5% for nearly seven years - will not be going up any time soon.

Markit senior economist Rob Dobson said: "The near-stagnation of manufacturing highlights the ongoing fragility of the economic recovery at the start of the year and provides further cover for the Bank of England's increasingly dovish stance."

Scott Bowman, UK economist at Capital Economics, said while short-term prospects for the sector remained poor, the recent fall in the pound - which makes UK goods less expensive for foreign customers - should provide some relief.

He added: "What's more, we expect global growth will pick up slightly in 2016, so manufacturing prospects should improve as the year progresses.

"However, the effect that the EU referendum vote has on the exchange rate and demand from Europe adds to the uncertainties facing the sector."

The PMI (Other OTC: PMIR - news) manufacturing figures come as the Confederation of British Industry (CBI) reported wider UK growth remaining subdued in February despite picking up a little from January, when it fell to its lowest level in nearly three years.

The business lobby's monthly growth indicator - based on surveys of manufacturers, retailers and services - edged up to +8 from +6 but remained below its levels throughout all of last year and 2014.

Rain Newton-Smith, the CBI's director of economics, said: "The British economy has made a slow start to the year, and growth has remained in the doldrums in February."

The figures come after financial market turbulence over the start of the year that has been sparked by fears over global economic growth.