UK manufacturing hit by oil prices

The UK’s manufacturing sector saw growth again in February according to the latest Purchasing Managers’ Index albeit at a slightly lower rate than in January, it was revealed yesterday.

The Market/CIPS Purchasing Managers’ Index fell to 51.2, down from 52 in January. Anything above 50 indicates a growing sector.

A major factor curtailing growth was the price of Brent crude oil, which rose by 10% in price last month, reaching a 10-month high.

Higher oil prices were said to have fed through to various costs associated with manufacturing such as prices for chemicals, energy and transportation.

"If this combination of rising costs and weak demand persists, sustaining output growth and job creation will become increasingly difficult," said Mr Dobson.

But economists still expect the UK economy to show expansion in the first quarter of 2012 therefore avoiding a technical recession, two successive quarters of negative growth.