* Surprise drop in headline figure masks strong components
* Jobs shed for 16th month but at slowest pace since June 08
* Orders-to-inventory ratio highest in over 5 years
By Christina Fincher
LONDON, Sept 1 (Reuters) - Britain's manufacturing sector dipped unexpectedly in August as employers cut jobs and inventories and the pace of pick-up in new orders slowed, purchasing managers' data showed on Tuesday.
The headline manufacturing purchasing managers' index fell to 49.7 last month from a downwardly-revised 50.2 in July. That was the first fall since February and well below the consensus forecast for a rise to 51.5.
However, a breakdown of the data suggested some reasons for optimism. Output rose at its fastest pace since December 2007 and stocks of finished goods fell at their second-fastest rate on record.
"The data are a mixed bag," said Rob Dobson, senior economist at Markit, the compiler of the survey.
"The recovery in output continued to strengthen and came from a broad sector and company-size base. However, the slower growth of new orders, continued substantial job losses and the surprising weakness exhibited by the investment goods sector are all causes for concern."
The headline manufacturing index rose above the 50.0 mark that separates contraction from expansion for the first time in over a year in July, raising hopes the sector could capitalise on a more competitive currency and aid a return to growth.
Tuesday's figures may provide a set-back to such hopes but will not dent them completely.
The new orders index slipped to 52.4 in August from a downwardly revised 54.8 in July but held in expansionary territory for the second consecutive month.
The new export orders index pointed to a stabilisation in August, ending more than a year of contraction, and a sharp fall in stocks of finished goods suggested firms may be forced to rachet up production should demand improve.
Indeed, the orders-to-inventory ratio, a forward-looking activity indicator, rose to its highest level since the start of 2004.
"Manufacturers continued to focus on trimming costs and excess capacity in August," the survey noted. "This was reflected in lower staffing levels and holdings of pre- and post-production stocks."
The way the PMI is calculated accentuates the pace of change rather than absolute levels and Markit's Dobson said it was not surprising the index should have tailed off after sharp rises earlier this year.
"The recovery is likely to continue, but may become more muted later in the year once the initial rebound and monetary and fiscal stimuli have run their course," he said. (Editing by Andy Bruce)