Factory

The UK's manufacturing sector has suffered its largest annual decline in output since 2013, according to the Office for National Statistics (ONS).

The ONS said output dropped 1.9% in March, compared with March 2015 - the largest annual fall since May 2013.

Amid the ongoing steel crisis, including the sale of Tata Steel's business in the UK, the figures showed that basic iron & steel production plummeted 37.3% on last year, contributing to an overall 4% decline in the production of basic metals and metal products.

These figures add to an increasingly gloomy picture of the UK economy. Growth is slowing down and the trade deficit hit its widest point since 2008.

Howard Archer, an analyst at IHS Global Insight, who yesterday described the trade deficit figures as "truly horrible", said: "The march of the makers was a veritable crawl in March and they went backwards over the first quarter!"

Lee Hopley, chief economist at EEF, the manufacturers’ organisation, said: “There isn’t too much in the data to lift economic spirits as a small increase in manufacturing output in March doesn’t change the picture of an overall weak start to the year. As ever, it’s a mixed picture across different sectors with a bit more evidence that the sectors hardest hit by the oil price collapse are now bottoming out while construction related sectors seem to be holding up.

“But, in line with the early warning signal from the PMI and the drop in consumer confidence, consumer facing sectors, including motor vehicles, are seeing weaker production trends at the start of the year. Whether this proves to be temporary is yet to be seen but UK manufacturers are far from alone in seeing this trend with other data from Europe suggesting that the industrial recovery is far from secure.”