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UK manufacturing activity shows small sign of growth

News of a slight growth in manufacturing activity in the UK has been welcomed - though fears have been expressed over the pace of the sector's recovery.

Growth in the sector slowed to 0.1% in September and while it represented the fifth consecutive growth in activity, it was the weakest month-on-month rate since April, according to the Office for National Statistics (ONS).

The year-on-year increase slowed to 4.8% in September from a near 16-year high of 6.1% in August.

The wider measure of industrial production, which includes manufacturing, mining and quarrying, grew 0.4% on the month and 3.8% on the year.

Other surveys in recent weeks have offered some hope that the industrial sector will continue to support the overall economy. The Chartered Institute of Purchasing and Supply's (CIPS) activity index, where a reading over 50 indicates growth, rose to 54.9 in October.

Manufacturers have benefited this year from healthier demand at home and overseas, improved competitiveness stemming from the weaker pound and customers replacing stockpiles used up in the recession.

Graeme Maclaughlin, relationship director of Barclays Corporate NI, said the news was positive.

"The ONS figures add to the recent spate of positive news emerging from UK manufacturing," he said.

"With higher than expected GDP in the third quarter also reported, it is hoped that the immediate impact of public sector cuts may be less severe than anticipated as the sector continues to bounce back strongly.

"However, there remains the potential for further challenges ahead, and an ongoing lack of manufacturing investment in comparison to key international competitors looks set to keep UK manufacturing well behind the global curve.

"With more than half UK goods manufactured bound for export, David Cameron's hope in seeking to double trade with China over the next few years should hopefully prove a catalyst for further investment in export markets."

The ONS said output fell in six of the 13 manufacturing sub-sectors compared to August. The main sub-sectors were electrical and optical equipment, and paper, printing and publishing.