The latest figures from the Office for National Statistics reinforce a picture of a significant slowdown in the UK manufacturing sector. Output edged up 0.1 per cent in July, after falling 0.4 per cent in June. And the ONS's overall index of production, which includes mining and energy industries, fell by 0.2 per cent over the month.
The ONS report came as the Transport Secretary, Philip Hammond, confirmed to a Parliamentary committee that the decision to award a £1.4bn train building contract to the German company Siemens, rather than Bombardier's UK plant, was based, in part, on the different credit ratings of the two firms. Siemens has an A+ credit rating, whereas Bombardier's is B++. "It [credit ratings] will have been a factor, but it is unlikely to have been a determining factor" Mr Hammond said. The decision to award Siemens the contract resulted in 1,400 redundancies at Bombardier's Derby plant. Siemens will build the trains in Germany and only 300 of the 2,000 UK jobs it creates will be directly employed manufacturing posts.
Yesterday's weak manufacturing figures from the ONS are likely to strengthen the arguments of those who argue that the sector is stagnating.