Bad news for George Osborne as new figures reveal UK manufacturing shrank in April

Overall industrial production grew by 0.1% for the month

George Osborne’s march of the makers is still stuttering, according to official figures released today showing that manufacturing output contracted by 0.2% in April on the previous month, following gains of 1.1% in March and 0.7% in February.

However, overall industrial production grew by 0.1% month on month, prompting City analysts to hail further evidence of an economic improvement. “The nascent industrial recovery is for now still under way” said Samuel Tombs of Capital Economics. Mining and quarrying, including oil and gas extraction, grew by 0.9% on the month according to the Office for National Statistics.

Lee Hopley, of the manufacturers’ organisation EEF, said: “We are still looking at a pick-up in activity across UK manufacturing through the second half of this year.” The Markit/CIPS purchasing managers’ survey for manufacturing in May showed overall activity expanding at the fastest rate in over a year.

The overall economy grew by 0.3% in the first quarter of 2013, meaning the UK avoided a return to recession, and surveys covering the services and construction sectors last week pointed to a brightening picture in the second quarter.

The National Institute of Economic and Social Research today forecast that the economy grew by 0.6% in the three months ending in May, down from the 1% expansion it estimated in the three months to April. The NIESR is forecasting total growth over 2013 of 0.9%, driven primarily by the services sector.

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