British manufacturing purchasing managers' index (PMI), a gauge of the industry activities, slipped to 55.3 in March from 56.2 in February, marking the lowest level since last July and well below the market estimates consensus of 56.7, announced Markit on Tuesday.
Though the latest manufacturing PMI faced the headwind last month, the index remains well above its long run average of 51.4, said the London-based survey compiler.
Meanwhile, Britain's manufacturers output has risen throughout the 12 months, underpinned by rising levels of incoming new orders, said Markit. And the domestic market remained as the prime source of new contract wins.
However, the new export orders weakened further in March, signaling the slowest pace of growth for ten months, undermined by the stronger pound, the British currency.
Manufacturing employment increased for the 11th consecutive month last month, with the rate of jobs growth staying close to February's near three-year high, data also showed. And the sector's price pressure was moderated last month, reflecting reports from companies of reduced prices for commodities, energy and metals, said Markit.
Rob Dobson, Senior Economist at Markit, said that "the latest Manufacturing PMI is likely to disappoint the markets, coming in a more than a full index point below expectation, but it's important to remember that this is in the context of the super-strong, near-record growth rates seen in the second half of last year."
Markit expects British economy to grow by at least 0.7 percent in the first quarter of 2014, as the goods-production sector is on course to pr0vide a further boost.
Martin Beck, senior economic adviser to the EY ITEM Club, commented:" A moderation in both export demand and output of investment goods suggest the recovery is still heavily dependent on the consumer."
But the overall story is positive, as the sector is still performing well above its historical average, and will contribute towards positive GDP growth in the first quarter of this year, said Beck in his analysis piece.
Paul Hollingsworth, British Economist at Capital Economics, also said that "Although March's report indicated that the sector's recovery may have lost some steam over the first quarter, this seems unlikely to herald the beginning of a renewed slowdown."
The London-based economic research company remains its forecast that the manufacturing sector will expand by a "healthy 3 percent or so" in 2014.