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British Manufacturing Output Falls In May

U.K. economist said the news added to a fear that Britain was 'perilously close to recession.'

LONDON (AP) -- British manufacturing output fell 0.5 percent in May compared to the previous month, the government said Monday. An index of production in the latest three months also dropped.

Paul Dales, U.K. economist at Capital Economics, said the report added to a fear that Britain was "perilously close to recession."

Output from the machinery and equipment industries dropped 1.5 percent in May, and no manufacturing sector reported a significant increase, the Office for National Statistics said.

Production output, which includes mining and utilities, decreased by 0.5 percent in the three months from March to May compared with the previous three months.

Output of consumer durable goods fell by 2.1 percent compared with the previous three months, and was 2.5 percent below the same period a year ago.

"The lower pound should mean that the manufacturing sector is the U.K.'s shining light, but with output no higher than eight months ago, it seems that the global and domestic slowdowns are having more of an impact," Dales said.

"The bad news on the U.K. economy is coming thick and fast at the moment, and the downturn appears to be deepening appreciably," said Howard Archer, chief European economist for Global Insight.

He said manufacturers will continue to struggle in the face of slowing domestic demand, weakening export activity and higher prices for energy and commodities.

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