THERE were signs of a recovery in the manufacturing sector in July as output rose for the fourth month in succession.

According to the Office for National Statistics, factory production rose by 0.1 per cent in July, leading to the longest sequence of monthly increases since the end of 2000.

But economists said that merely underlined the weakness of the sector rather than its strength, with output slowing from the 0.2 per cent growth seen in the previous month.

Royal Bank of Scotland economist Geoffrey Dicks said it was "a long, slow grind" for manufacturers to pull clear of recession, but the data suggested that "at least the worst is behind us for UK industry".

If output remains positive and official figures for the three months to the end of September show overall growth, then the UK manufacturing sector will have emerged from recession.

Manufacturers have suffered this year from the strength of the pound, weak growth in Europe and intensifying competition from Asia that has limited their scope for raising prices.

At the same time, consumers have stayed at home rather than spent in the high street as concerns grew about a stagnating housing market, pensions and potential tax rises.

Raw material and energy costs have also risen, putting increasing pressure on margins.

Yesterday's data revealed that consumer durable goods fell by three per cent between May and July compared with the previous three months.

HSBC economist John Butler said: "The manufacturing recovery is still being held back by the weaker consumer outlook."

Output from production industries, which includes mining and utilities, as well as manufacturing, fell 0.3 per cent in July.

Standard Chartered economist Gavin Redknap said the Bank of England was unlikely to act to help manufacturers.

He said: "The bank's focus rightfully remains on the far more important consumer sector.

"Signs of life in that and the housing market suggest that further rate cuts are unlikely before the year-end."