Manufacturing output fell by 0.9 per cent between January and February, the slowest rate of decline for six months.

But it was still the twelfth month running that output has fallen, the longest uninterrupted series of falls since the recession of the early 1980s.

It was also the latest of a series of economic pointers indicating that, while still slowing, the economy is no longer in free fall and is starting to respond to rock-bottom interest rates and the Government’s stimulus.

Nevertheless, the annual rate of decline reached 13.8 per cent in February, steeper than at any time since January, 1981.

The manufacturing slowdown was less universal than in recent months. National Statistics said output decreased in eight of its 13 sub-sectors during the month of February, but picked up in the other five.

The biggest month-on-month fall was a drop of 10.6 per cent in the output of motor vehicles – although that of “motor vehicle bodies, trailers and parts and engine parts” staged a marginal two per cent recovery.

Over the latest three months, though, when manufacturing output as a whole fell by 6.5 per cent, that of vehicles was 30.7 per cent down on September/November and 44.9 per cent short of that in the same months a year earlier.

For motor bodies and engine parts the three-monthly drop was 19.1 per cent, making the year-on-year decline 33.7 per cent.

Output of machinery and equipment almost held its own in February, but was still was down by 11.7 per cent per on the three-monthly comparison.

“It may well be that the numbers around the turn of the year (when manufacturing output fell by three per cent between December and January) were extraordinarily weak,” said Alan Clarke, UK economist at BNP Paribas.

“As factories start opening up after those shutdowns, the pace of contraction will be less.”

Stephen Lewis, chief economist at Insinger de Beaufort, commented: “That is a little less sharp than the market was expecting, but the trend is unmistakeably downwards. I think the UK manufacturing industry has benefited to some small extent from the depreciation of sterling, but the benefits from that have probably been largely seen already.”

David Kern, chief economist at the British Chambers of Commerce, warned: “Although manufacturing did not fall as sharply as feared, this should not obscure the seriousness of the problems facing the sector. Over the past year, we have witnessed a severe decline in output, made worse by the collapse of world trade. We urge the Chancellor to take corrective measures in the Budget.”