UK manufacturing output leaps unexpectedly but still below pre-recession level and economists cautious
9th June 2016
UK manufacturing output jumped by 2.3 per cent month-on-month in April, wrongfooting economists who had expected a flat position, but British Chambers of Commerce emphasised it was still below pre-recession levels.
The leap in manufacturing output in April meant that it was up by 0.8 per cent on the same month of last year, according to the figures from the Office for National Statistics. The figures contrast with surveys from the Chartered Institute of Procurement & Supply, which have signalled continuing manufacturing weakness.
Broader industrial production, which includes mining and quarrying, oil and gas extraction, and electricity, gas and water supply as well as manufacturing output, rose by two per cent month-on-month in April. This advance was achieved in spite of a 1.3 per cent month-on-month fall in oil and gas extraction.
The manufacturing output and industrial production figures come amid a slew of weak UK economic indicators.
David Kern, chief economist at British Chambers of Commerce, said: "After a long run of disappointing results, April's stronger-than-expected figures should provide a much-needed boost to confidence at a time when most economic figures published recently have been disappointing."
However, he added: "There is no room for any complacency. Manufacturing output is still below its pre-recession level, and longer-term trends show that the sector is struggling."
In his March 2011 Budget, Chancellor George Osborne spelled out his vision of "a Britain carried aloft by the march of the makers".
Paul Hollingsworth, UK economist at consultancy Capital Economics, said: "Despite the upbeat tone of April's industrial production figures, it is far too soon to proclaim that the sector is out of the woods, or shrugging off Brexit uncertainty.
"We would caution against reading too much into any one month's figures. After all, they are particularly volatile and are often revised. Note that the rise in manufacturing output in part reflected an 8.6 per cent monthly rise in pharmaceutical production.
"What's more, the increase in electricity and gas output probably reflected the cool weather in April. These factors will probably be reversed in time."
The National Institute of Economic and Social Research think-tank yesterday estimated that the UK economy would have grown by 0.5 per cent in the three months to May. While this would be an improvement on official first-quarter growth of 0.4 per cent, it would still be well adrift of the UK's long-term average growth rate.
Source: Herald Scotland
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