UK manufacturing growth cools

London - Britain's main manufacturing trade association trimmed its growth forecast for 2014 on Monday after its members reported the first fall in export orders since early 2013.

The EEF association said its quarterly survey of members showed slowing growth in output and new business over the last three months, and cut its forecast for factory output growth in 2014 to 3.3% from 3.5%.

This would still be the sector's fastest expansion since 2010, when output rebounded by 4.2% after slumping more than 10% in 2009.

But the forecast downgrade adds to signs that the British economy may lose some pace in the second half of this year.

The EEF said that with the euro zone economy stagnating, sterling strong and political risks on the rise, the picture for demand was now more uncertain than for some time, though the overall picture remained positive.

"We're seeing manufacturers continue to recruit for skilled jobs and increase their plans to invest in the coming year - exactly what the UK economy still needs for balanced growth," said Lee Hopley, the EEF's chief economist.

"However, there are clearly increasing downside risks overseas which could make sustaining strong growth and particularly stronger exports more challenging going forward."

The latest purchasing managers' index for Britain's manufacturing sector, a closely watched gauge of industrial activity, is due at 08:30 GMT. Economists polled by Reuters expect growth slowed slightly in August from July.

The EEF survey was conducted between July 30 and August 20, with responses from 298 companies.