Manufacturing production falls
Tuesday 07 July 2009
Manufacturers suffered a blow today as official figures showed a return to falls for the sector.
Figures from the Office for National Statistics (ONS) showed production dropped 0.5 per cent between April and May.
The downturn was extended into April as figures for that month were revised down from 0.2 per cent growth to 0 per cent.
Economists, who had predicted a rise for the sector in May, were taken by surprise by the figures.
They said the reversal in manufacturing growth was "disappointing" and would lead to renewed fears that the economy as a whole had continued to slump.
In its three-monthly figures, the ONS said production decreased by 1.2 per cent. But this was compared with a 2.9 per cent decrease in April.
Howard Archer, of IHS Global Insight, said the result undermined hopes that the economy may have avoided contraction in the second quarter and "offers a clear reminder that the economy is still in a very fragile state despite improving significantly from the lows seen in the first quarter".
He said manufacturers still faced "serious obstacles" and that sustainable growth may be out of reach of the sector for some time to come.
Manufacturers have been helped somewhat by their practice of de-stocking and a more competitively priced pound.
But the sector still faces challenges from reduced demand.
The ONS said the most significant decreases were 2 per cent in the paper, printing and publishing industries and 1.7 per cent in machinery and equipment.
James Knightley, of ING, said the 2 per cent drop for publishing was "presumably because of growing use of electronic music files".
He said that, while the drop was a disappointment, there was still "hope that the worst is over for the sector" based on recent positive in survey data.
"With monetary policy remaining very loose and sterling weakness set to provide ongoing support, we believe that the sector can return to positive year-on-year growth late next year," he added.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...