Recession fears as output falls 0.2% according to ONS

Manufacturing has now suffered a 0.6% year on year dip in output the ONS data reported. The malaise was set to continue in 2012 claimed Chris Williamson, chief economist at Markit. He said: "Forward looking indicators suggest that we should not expect any improvement in the economy during the first quarter of 2012. Business confidence for the year ahead remains very subdued, largely due to ongoing uncertainty about prospects for the Eurozone and belt-tightening by domestic consumers, businesses and the public sector." Export growth to Amercia and Asia offered some hope, Williamson added. But optimism was tempered by uncertainty in the EU. He said: "Manufacturers may benefit from rising sales to markets such as the United States and emerging markets such as China, where there are some signs of strong growth appearing. But the big worry is the large euro zone market, which accounts for around two-fifths of UK overseas trade and remains the biggest threat to the UK economy." Lee Hopley, Chief Economist at EEF, the manufacturers' organisation said: "These figures don't bode particularly well for the final quarter of last year, although there are a few glimmers of light with some sectors continuing to post solid monthly increases in output. Manufacturers have had more than their fair share of challenges through the recovery so far and the continuing uncertainty around the eurozone crisis is now another factor weighing on orders and confidence. But, if demand in other market holds up the sector should continue to make a much needed contribution to balanced growth this year."