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Output falls for sixth consecutive month
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07/10/2008
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UK manufacturing output has fallen for the sixth month on the bounce; its worst run for getting on for 30 years.
According to official figures issued from the Office for National Statistics today (7 October) manufacturing output fell 0.4 per cent from July; a good deal worse than the 0.2 per cent economists had predicted. According to Bloomberg, the last time factory production fell for at least six consecutive months was in 1980.
The data for the latest three months to August – generally considered to be a more robust economic indicator – showed a hefty 1.1 per cent fall compared with the previous three months. There were widespread decreases in output with the most significant falls being 3.1 per cent in the electrical and optical equipment industries and 1.6 per cent in the food, drink and tobacco industries. However, there was a significant increase in output of 1.8 per cent in the chemicals and man-made fibres industries.
Manufacturing output in the latest three months was 1.6 per cent lower than the same period a year ago.
The single month fall for August reflected a significant decrease in output of 2.3 per cent in the transport equipment industries.
Commenting on the figures, Barclays head of UK manufacturing Ray O'Donoghue (pictured), said the statistics showed weakness in order books and output.
He went on: "The export market, however, continues to remain robust and with a further drop in the value of the pound this is offering a key stabilising effect on the manufacturing industry.
"The current market means all manufacturers are looking again at reducing volatility wherever they can, for example through the use of fixed-price contracting and hedging instruments. "
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Author
Ken Hurst
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