UK factory orders gauge hits six-month high in February - CBI

FILE PHOTO: The sun is seen rising behind skyscrapers and buildings in in the City of London financial district, London, Britain, February 5, 2020. REUTERS/Toby Melville

LONDON,(Reuters) - A gauge of British manufacturing orders hit a six-month high in February, adding to signs of a rebound in business confidence since Prime Minister Boris Johnson’s election victory in December.

The Confederation of British Industry’s (CBI) monthly manufacturing orders balance rose to -18 from -22 in January, slightly above the consensus forecast of -19 in a Reuters poll of economists.

Still, the reading remained below the survey’s long-run average of -13, underscoring the weakened state of Britain’s manufacturing sector that has been hit by Brexit uncertainty and a slowing global economy.

Official data show manufacturing output contracted by 1.5% in 2019 as a whole.

“It is encouraging to see manufacturers reporting some early signs of a turnaround in activity, but it’s probably still too early to say whether we’ve seen the end of the slowdown in the sector,” said Alpesh Paleja, CBI lead economist.

Output expectations rose to their highest since February 2019, the CBI said.

“Notwithstanding improving optimism, the sector is still grappling with longer-term uncertainty over the UK’s future relationship with the EU,” Paleja said.

Reporting by Andy Bruce, editing by Sarah Young; +44 20 7542 7748;