Manufacturing becomes latest sector to show jump in output

Manufacturing is the latest bright spot on a rapidly improving economic horizon, official figures suggested yesterday.

The Office for National Statistics reported that output from Britain's manufacturers expanded by 1.9 per cent in June, the fastest pace since 2010 and well ahead of City expectations of 1 per cent growth.

For the first time since 1992 all sectors of the manufacturing industry – from rubber products to chemicals to metals – showed an improvement during the month.

The figures were seized upon by City economists as evidence that the recovery is becoming more broad based, and less dependent on services expansion. "It looks as if the economy is benefiting from a period of both stronger and better-balanced growth," said Samuel Tombs of Capital Economics.

"It is striking that the improved news on the UK economy is coming across a wide range of sectors, which lifts hopes that the recovery is broadening as well as deepening," said Howard Archer of IHS Global Insight.

The overall level of industrial production, which includes energy generation, was up 1.1 per cent on the month. The ONS estimates that manufacturing grew by 0.7 per cent in the second quarter of the year, following a contraction of 0.2 per cent in the first quarter.

In a further sign of growing economic momentum, the Society of Motor Manufacturers and Traders (SMMT) reported yesterday that sales increased by 12.7 per cent in July to 162,228, the 17th successive monthly rise. The SMMT also raised its forecast for new UK car sales in 2013 to 2.22 million.

The housing market also seems to be bubbling again, with the Halifax reporting that house prices rose 0.9 per cent in July. The bank reported that home sales in the first half of the year were up 6 per cent on the same period of 2012. Martin Ellis, Halifax's housing economist, said that the Treasury's Help to Buy subsidies and the Bank of England's Funding for Lending Scheme are likely to be raising demand for housing.

The most recent surveys of services manufacturing and construction all indicate healthy expansion, which has prompted many private sector economists to revise up their growth forecasts for 2012.

The latest estimate from the National Institute of Economic and Social Research, released yesterday, is that the economy grew by 0.7 per cent in the three months to July. That would signify progress on the 0.6 per cent expansion between April and June estimated by the ONS last month.

However, despite June's strong manufacturing growth, the level of output from the sector remains 10 per cent below its pre-recession peak, reached in early 2008. Output is also still 3 per cent below its level in the middle of 2011, before activity double-dipped in the eurozone crisis. "There is still a long way to go," said Nida Ali, economic adviser to the Ernst and Young Item Club.

The Bank of England will unveil its own latest growth forecasts today in its quarterly Inflation Report. The Bank will also set out its thinking on the merits of offering financial markets so-called "forward guidance" on the future path of interest rates.

voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
Life and Style
fashion Designs are part of feminist art project by a British student
Joining forces: young British men feature in an Isis video in which they urge Islamists in the West to join them in Iraq and Syria
newsWill the young Britons fighting in Syria be allowed to return home and resume their lives?
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
Arts and Entertainment
Residents of Derby Road in Southampton oppose filming of Channel 4 documentary Immigration Street in their community
voicesSiobhan Norton on why she eventually changed her mind
ebookA unique anthology of reporting and analysis of a crucial period of history
Scottish singer Susan Boyle will perform at the Commonwealth Games opening ceremony in Glasgow
commonwealth games
Arts and Entertainment
Dwayne 'The Rock' Johnson stars in Hercules
filmReview: The Rock is a muscular Davy Crockett in this preposterous film, says Geoffrey Macnab
Life and Style
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Insight Analyst – Permanent – Up to £40k – North London

£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

Test Lead - London - Investment Banking

£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

Day In a Page

Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

Michael Jamieson: Why weight of pressure rests easy on his shoulders

The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes