Manufacturers continued their modest expansion throughout February, but recent stability could suggest declines in growth later this year, an economist has warned. Figures from the latest industry report from the Chartered Institute of Purchasing and Supply (CIPS) show that the rate of expansion eased slightly last month, dropping to 51.7 in February from 51.8 the month prior. A reading above 50 on the purchasing managers’ index (PMI) indicates expansion, while a mark below suggests contraction. The report also shows both input and output prices rising to their best mark in a year. But while the sector showed another month of healthy expansion, British manufacturers still lagged behind the rate of expansion in the euro zone, which grew to 54.5 on the index. George Buckley, UK economist at Deutsche Bank, suggests that the industry’s consistent numbers, while a good sign now, could signify trouble ahead. “One interesting feature of the PMI surveys recently has been the increased stability in their headline indices,” Buckley said. “Over the past six months, the headline index has varied within only a 0.6 point range, which is the most stable that it has ever been. “Periods of benign movements in the PMIs do not tend to last for long, and it will likely be only a matter of time before the relative stability in the surveys we have seen over recent months gives way to a trend decrease, a trend increase or simply higher volatility in the figures.

“With our own view that the economy will begin to slow again towards the end of the year, we expect that the PMIs may break their current stable mould by a shift downwards.”