MANUFACTURERS appear to be on the road to recovery after official figures showed the first monthly improvement in output since August.

The sector, which has been in recession for the past year, enjoyed a 0.4 per cent increase in output in February, the Office for National Statistics (ONS) said.

Economists said the improvement was slightly stronger than initial forecasts and marked a significant milestone for Britain's industrial firms.

HSBC economist John Butler said: "We think the manufacturing sector has now troughed as the global economy picks up through the year."

Recent surveys from the CBI and the Chartered Institute of Purchasing and Supply have already indicated signs of a revival.

Alex Scott, of Seven Investment Management, added: "The Bank of England has held off from a rate rise to give manufacturing something of a break and, arguably, the results are starting to come through now."

But with the sector still in the early stages of a recovery, most City experts stuck by earlier forecasts of a mid-summer rate rise.

Much of the improvement in the latest ONS figures was achieved by the chemicals and man-made fibres sector, with a 2.4 per cent increase in output.

Without that boost, manufacturing's month-on-month output growth would have been 0.1 per cent in February, the ONS said.

Despite the recent upturn, manufacturing output for the last three months was still 1.4 per cent lower than the previous three months.

The breakdown of those figures shows a 6.2 per cent fall in output of electrical and optical equipment and a 2.3 per cent decline in the machinery and equipment sector.

Manufacturing output is now 6.2 per cent lower than the three-month period a year earlier.

Separate figures from the ONS showed Britain's trade deficit with the rest of the world widened slightly to £2.6bn during February. The figure a month earlier was £2.5bn.