The continuing downturn in the British manufacturing sector shows that the economy is making little progress towards re-balancing and the threat of a triple-dip recession is still live, Capital Economics UK Economist Samuel Tombs said Wednesday.

The latest purchasing managers' survey by Markit Economics and CIPS showed that UK's manufacturing sector remained in the contraction territory in March. Though the corresponding index rose to 48.3 from 47.9 in February, it remained the no-change 50 mark that separates growth from contraction.

Production declined further to the lowest level since October, prompting goods producers to reduce their workforces for the eighth successive month. Meanwhile, new orders decreased at a slower pace than in the previous month. The weakness in the latest data could be partially attributed to unusually bad weather which may have disrupted supply chains.

According to Capital Economics, given the small size of UK's manufacturing sector, a 1 percent quarterly fall in manufacturing output would only knock 0.1 percentage points off the overall GDP growth.

With production in the British construction sector falling, and service sector output remaining muted, another poor industrial performance could well be enough to put the economy back in recession, the firm said.

However, the the latest monthly Industrial Trends survey by the Confederation of British Industry and quarterly Economic Survey by the British Chamber of Commerce have contained some signs of recovery, the economist noted.

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