Manufacturing hopes dashed

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The Independent Online
HOPES that the manufacturing recession might be lifting were dashed yesterday with new figures showing production unchanged between June and July.

In the three months ending in July, manufacturing output was flat compared with the previous three-month period, the most reliable basis of comparison.

A 3.7 per cent rebound in energy production in July, from North Sea oil and gas and the electricity industry, raised overall industrial output by 1 per cent on the month, the Central Statistical Office said.

Meanwhile, there was more depressing news from the motor industry, as separate figures showed that car production last month fell nearly 8 per cent from a year ago.

Economists said the industrial production figures were consistent with an economy 'treading water', and would stay depressed for the next few months.

The statistics confirmed recent CBI surveys showing worse-than-expected orders and output, with little evidence of a reversal before the new year.

Glenn Davies, chief economist with Credit Lyonnais, said: 'There were signs that industry was making a little headway but that has completely stalled. The economy may be into a second dip of the recession.'

In manufacturing during the three months to July, food, drink and tobacco output increased by 1 per cent from the previous three months, helped by warm weather.

But metals output fell by 1 per cent, because of the Ravenscraig steel works shutdown and other maintenance closures, and chemical output also fell by 1 per cent.

Consumer goods production rose 0.5 per cent, capital goods output was unchanged and intermediate goods output fell by 1.3 per cent in the three-month period. Overall energy output was down 2.1 per cent, with coal production down 5.7 per cent in the three months to July on the previous three months.

According to the latest figures from the Society of Motor Manufacturers and Traders, total output of cars in August was 53,000 - down by more than 4,000 on August 1991.

The main reason for the slump in output was a 24 per cent fall in production of cars for export. However, production of vans and trucks was up year-on-year by almost a half, to 12,437.

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