Official manufacturing output data disappoints

The Index of Manufacturing from the Office for National Statistics showed a fall of 1.4% in February 2012 compared with February 2011. The month on month figure also fell by 1.0 % between January 2012 and February 2012. Commenting on the data, Andrew Johnson, senior economist at the manufacturers' organisation EEF, said: "The range of current data highlights the volatility affecting manufacturing. Nevertheless, today's data is a stark reminder that despite the positive signs in the last couple of months, the sector is still being buffeted by uncertainty and weakness in key markets. There is nothing to change our view that 2012 will remain a challenging year." Chris Williamson, chief economist at Markit believed the fall to be "worrying" adding that it "cast a shadow of doubt on the UK's economic performance in the first quarter" although a rebound in factory output from the decline was likely. He added: "However, with manufacturing accounting for only around 10% of the economy, the far larger service sector is more important as far as economic growth is concerned."