Factory figures raise triple-dip recession fears
Friday 11 January 2013
Fears Britain is heading for a triple-dip recession have been fuelled by figures showing manufacturing output shrinking unexpectedly in November.
Factory output fell 0.3% month-on-month on the back of a 1.3% decline in October, the Office for National Statistics (ONS) said.
The wider measure of industrial production edged up 0.3% but was below forecasts for a 0.8% rise.
The numbers add to a recent flow of disappointing economic data, stoking concerns of a fresh contraction in the fourth quarter and that the UK economy could be on the verge of recession again if activity remains under pressure in the first quarter of the year.
Chris Williamson, chief economist at Markit, said: "There are signs that the situation in manufacturing improved in December but a deteriorating trend in the far larger services sector and forecasts of heavy snow for January have raised the possibility that the economy could contract in the first quarter, meaning the country slid into a triple-dip recession."
The industrial figures are seen as particularly disappointing given the 11.3% rebound in oil and gas production thanks to a North Sea oil field reopening after extended maintenance shutdown.
The figures also confirmed the tough conditions for construction firms. Output in the sector fell 9.8% year-on-year in November.
Last week survey data suggested the services sector shrunk in December for the first time in two years.
Economists also warned this week that the trade deficit, which narrowed in November, has not improved enough and will act as a drag on GDP in the fourth quarter.
There was however a glimmer of hope for manufacturing. A recent Markit/CIPS purchasing managers' index suggests a return to growth last month for the first time since March and would be the highest reading since September 2011.
Howard Archer, chief UK and European economist at IHS Global, said manufacturing still faces tough domestic and global conditions.
"Domestic demand for manufactured goods is handicapped by current muted investment intentions and tightening public spending. Furthermore, consumers' purchasing power is coming under renewed pressure from a move back up in inflation and muted earnings growth," he said.
New UK station Russia Today gives a very bizarre view of Britain
By performing as African Americans or Indians, white people get to play act a kind of 'imaginary liberation', writes Michael Mark Cohen
New essay by JK Rowling went live on Pottermore site this morning
Top Gear presenter is no stranger to foot-in-mouth controversy
- 1 'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
- 2 Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
- 3 Topshop at centre of row over body image as 'shocking' skinny mannequin photo goes viral
- 4 If you think Russell Brand’s new book is confused, you should read what his critics have to say about it
- 5 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
Halloween 2014: From the Screaming Man of Pluckley to the 'White Lady' of the Tower of London - Britain's 20 most haunted places
Russian politician says Apple CEO Tim Cook should be 'banned' from country after coming out as gay
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Maureen Lipman says 'she can't vote Labour while Ed Miliband is leader'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
iJobs Money & Business
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...