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UK manufacturing growth up just 0.1% in August UK manufacturing growth up just 0.1% in August
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Growth in UK factory output came to a standstill in August in the latest sign of slowing economic recovery in the second half of the year.Growth in UK factory output came to a standstill in August in the latest sign of slowing economic recovery in the second half of the year.
Manufacturing output increased by just 0.1% over the month according to the Office for National Statistics, further frustrating government ambitions of rebalancing the economy away from consumer spending and towards production and exports. It compared with a 0.3% increase in July. The manufacture of metals, wood and paper were among the drivers of August’s modest growth. Manufacturing output increased by just 0.1% over the month according to the Office for National Statistics (ONS), further frustrating government ambitions of rebalancing the economy away from consumer spending and towards production and exports.
UK manufacturing has yet to fully recover from the huge blow dealt to the sector by financial crisis, with the sector still 4.4% below than its 2008 peak. It compared with a 0.3% increase in July. The manufacture of metals, wood and paper were among the drivers of August’s modest growth.
Rob Wood, chief UK economist at German bank Berenberg, said that indirectly, the tensions between Russia and the west over Ukraine were having an impact on the sector. UK manufacturing has yet to fully recover from the blow dealt by the financial crisis, with the sector 4.4% below its 2008 peak.
“UK manufacturing is entering a soft patch as the fall-out from events in Ukraine spreads. Ukraine and Russia are of little direct importance to UK exporters. But the manufacturing cycle is highly integrated across countries. That means the decline in business confidence and German manufacturing output triggered by Russia’s aggression in Eastern Ukraine will continue to spread to the UK over the second half of the year.” Rob Wood, chief UK economist at the German bank Berenberg, said, indirectly, the tensions between Russia and the west over Ukraine were having an impact on the sector.
“UK manufacturing is entering a soft patch as the fallout from events in Ukraine spreads. Ukraine and Russia are of little direct importance to UK exporters. But the manufacturing cycle is highly integrated across countries. That means the decline in business confidence and German manufacturing output triggered by Russia’s aggression in eastern Ukraine will continue to spread to the UK over the second half of the year.”
Wood forecast economic growth of 0.6% in the third quarter, following 0.9% in the second. The first official estimate will be published by the ONS on 24 October.Wood forecast economic growth of 0.6% in the third quarter, following 0.9% in the second. The first official estimate will be published by the ONS on 24 October.
Despite the poor monthly performance, recent large-scale revisions to historic data by the ONS suggested manufacturing has fared better on an annual basis than previously thought. Manufacturing output in the year to August was up 3.9%. Despite the poor monthly performance, recent large-scale revisions to historic data by the ONS suggested manufacturing fared better on an annual basis than previously thought. Manufacturing output in the year to August was up 3.9%.
The wider measure of industrial production, which includes mining and utilities as well as manufacturing, was flat in August, following 0.4% growth in July. It took the annual rate of growth to 2.5% but production was still 9.6% smaller than its pre-crisis peak. The wider measure of industrial production, which includes mining and utilities as well as manufacturing, was flat in August, following 0.4% growth in July. It took the annual rate of growth to 2.5% but production remained 9.6% smaller than its pre-crisis peak.
Paul Hollingsworth, UK economist at Capital Economics, said: “August’s fairly weak industrial production figures provide further evidence that the UK’s economic recovery remained unbalanced in the third quarter.”Paul Hollingsworth, UK economist at Capital Economics, said: “August’s fairly weak industrial production figures provide further evidence that the UK’s economic recovery remained unbalanced in the third quarter.”