Manufacturing dip fuels concerns


Fears of a double-dip recession were fuelled today as official figures revealed the first three-month decline in manufacturing output in two years.

Manufacturing fell 0.7% in the three months to October, compared with the previous months, while output also fell 0.7% month-on-month, the Office for National Statistics (ONS) said.

The decline was driven by falls in the metals, repair and pharmaceutical industries and dragged the overall index of production, which includes the mining and energy sectors, down by a worse-than-expected 0.7%.

Economists said the figures added to mounting evidence that the economy will contract in the fourth quarter of the year, between October and December, following similarly bleak purchasing managers' index (PMI) data.

Samuel Tombs, UK economist at Capital Economics, said: "October's official UK industrial production figures are even weaker than we or the consensus had expected and suggest that the risk that the overall economy re-enters recession in the fourth quarter remains high."

Industry surveys have suggested that the manufacturing sector's performance has worsened recently, fuelling fears that the UK could slide back into recession.

The Markit/CIPS PMI survey reading for manufacturing last week saw further declines in orders and employment as the index hit its lowest level since early 2009.

The manufacturing sector played a vital role in the early stages of the UK's recovery as it benefited from the fall in the value of the pound and the "rebalancing" of the economy through more exports.

But the eurozone debt crisis has hit exports, while UK demand is being held back by the consumer spending squeeze and public spending cuts.

Chris Williamson, chief economist at Markit, said: "The current woes of manufacturers raises the likelihood that the UK economy will stagnate in the fourth quarter, and the combination of subdued demand at home and the ongoing crisis in the eurozone suggests that the risks of the UK following the single currency area into another recession have grown considerably."

The ONS added that mining and quarrying fell by 14.1% in October compared with a year ago, while energy supply fell by 5.4%.

Energy supply fell 4.9% month on month as fewer households cranked up the thermostat during the warmest October since 2006, the ONS said.

David Kern, chief economist at the British Chambers of Commerce (BCC), said he would like to see the Bank of England announce a further £50 billion of quantitative easing at its policy meeting tomorrow to stimulate growth.

However, most economists expect the Bank to leave QE levels unchanged at £275 billion, following October's £75 billion boost.

Mr Kern said: "While there is no need for undue pessimism about the sector's future, as many firms preserved their skills base during the recession, there will be serious challenges in the months ahead, particularly for those that rely on exporting to Europe."


Start your day with The Independent, sign up for daily news emails
Life and Style
Steve Shaw shows Kate how to get wet behind the ears and how to align her neck
healthSteven Shaw - the 'Buddha of Breaststroke' - applies Alexander Technique to the watery sport
Arts and Entertainment
The sight of a bucking bronco in the shape of a pink penis was too much for Hollywood actor and gay rights supporter Martin Sheen, prompting him to boycott a scene in the TV series Grace and Frankie
Arts and Entertainment
Lena Headey as Cersei Lannister
TVSPOILER ALERT: It's all coming together as series returns to form
footballShirt then goes on sale on Gumtree
Terry Sue-Patt as Benny in the BBC children’s soap ‘Grange Hill’
voicesGrace Dent on Grange Hill and Terry Sue-Patt
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
Arts and Entertainment
Twin Peaks stars Joan Chen, Michael Ontkean, Kyle Maclachlan and Piper Laurie
tvName confirmed for third series
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine