Better-than-expected output figures lifted spirits in the manufacturing sector today after a shock slump in activity a month earlier.

The Office for National Statistics (ONS) said manufacturing output rose 0.9 per cent in March, but the performance across the first quarter of 2012 was still 0.8 per cent lower than a year ago due to the 1.1 per cent slump in February.

With the third warmest March on record depressing demand in the energy sector, the ONS measure for all industrial output fell 0.3 per cent in the month.

The figures will not result in a revision to last month's estimate of GDP for the first quarter, which at 0.2 per cent lower sent the UK back into recession.

Economists said the stronger-than-expected manufacturing figure, which compared with forecasts for growth of 0.5 per cent, brought the ONS figures more into line with stronger survey data from the likes of the CBI.

Markit chief economist Chris Williamson said the figures also provided some reassurance that the UK manufacturing sector is 'not on its knees'.

However, he warned the sector is struggling to grow in the face of weak demand at home, recession in continental Europe and weaker growth in export markets.

Mr Williamson said: "The US has been something of a bright spot for exporters, but even there signs have appeared to show growth weakening.

"At the same time, demand at home clearly remains very subdued amid ongoing low levels of business and consumer confidence. There appear to be very few sources of new sales growth for UK producers at the moment."