UK factories report falling output and orders in February: CBI

A worker in Brandauer's factory processes new orders as they benefit from the reshoring of manufacturing following global supply chain disruption in Birmingham

LONDON (Reuters) - British manufacturing output and orders sagged in February and price pressures cooled again, an industry survey showed on Tuesday.

The Confederation of British Industry's (CBI) gauge of factory output for the past three months fell to -16 from -1, the lowest reading since September 2020.

While its balance of new orders rose slightly to -16 from -17, it remained firmly in negative territory.

"Conditions in manufacturing remain challenging, with output disappointing and order books having thinned out since late last year," said Anna Leach, deputy chief economist at the CBI.

"However, if growth is going to return to the sector on a sustainable basis, then manufacturers need more than the boost some will receive from lower energy prices over the winter season."

Leach called on finance minister Jeremy Hunt to announce measures in his March 15 budget that would improve the competitiveness of British manufacturers.

A separate survey of the manufacturing industry published earlier on Tuesday by S&P Global and trade body CIPS similarly showed a contraction in factory activity this month, albeit less severe than in January.

The CBI's gauge of price pressures fell in February, adding to signs that the momentum behind inflation in Britain's economy is receding.

The survey of 280 manufacturers took place between Jan. 26 and Feb. 13.

(Reporting by Andy Bruce; Editing by William Schomberg)