British manufacturing jumps in Feb as economy extends recovery

LONDON (Reuters) - British manufacturing grew much more strongly than expected in February, another sign that the country's economy has kept up its strong pace going into 2014, official data showed on Tuesday.

Manufacturing output expanded by 1.0 per cent in February from January - its biggest increase since September last year - and was 3.8 per cent higher than in the same month of 2013, the Office for National Statistics said.

Economists in a Reuters poll had expected a month-on-month rise of 0.3 per cent and a 3.1 per cent increase for the year.

Overall industrial output, which includes power generation and Britain's North Sea oil production as well as manufacturing, climbed 0.9 per cent on the month, recovering from a weak January when bad weather hampered North Sea oil and gas production.

The figure was stronger than a forecast of 0.3 per cent increase in a Reuters poll of economists.

Compared with a year ago, industrial output was up 2.7 per cent, the ONS said.

The growth in manufacturing in February compared with January was driven by pharmaceuticals, recovering from a dip in the previous month, as well as transport equipment, food products, beverages and tobacco, the ONS said.

British finance minister George Osborne last month announced measures to help manufacturers as part of the government's long-standing plan to make Britain's economy less dependent on consumer demand.

After staging a surprisingly fast recovery in 2013, Britain's economy is growing more quickly than almost all other advanced economies, a fillip for Osborne who will attend a meeting of the International Monetary Fund this week.

Last year, he resisted pressure from the IMF to change course and spend more to get the recovery going.

There were other signs on Tuesday of strength in Britain's economy.

A survey by the British Chambers of Commerce showed six key manufacturing balances, including investment plans, hit at all-time highs in the first quarter and services were strong too.

A second survey on Tuesday showed British employers are raising the salaries they offer to new permanent staff at the fastest rate in nearly seven years as they struggle to fill vacancies.

Despite the recent strong growth, Britain has a way to go to recover fully from the effects of the financial crisis.

Manufacturing remains 8.2 per cent smaller than it was when British overall economic output hit its peak in early 2008.

The ONS also said that in the three months to the end of February - a smoother reading than the sometimes volatile monthly numbers - manufacturing and industrial production were both up 0.8 per cent with the previous three months, picking up a bit of speed.

It remains to be seen if the strength in manufacturing continues. A survey of purchasing managers published last week showed Britain's factory sector saw its slowest growth in eight months in March.

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