-Oct manufacturing output -1.3% m/m; -2.1% y/y
-Oct industrial production -0.8% m/m; -3.0% y/y

LONDON (MNI) – Manufacturing output fell sharply on the month in
October as output of alcoholic beverages and pharmaceutical goods
declined, figures from National Statistics showed Friday.

These latest figures are very disappointing and show manufacturing
getting off to a bad start to Q4 following a 0.7% rise on the quarter in
Q3. Output has been negative on a trend basis throughout most of 2012
and this looks set to continue with the sector subtracting from overall
GDP growth in the final quarter of the year.

Moreover, the expected bounceback in industrial production,
following a large drop last month due to a plunge in mining and
quarrying output didn’t happen as oil output continued to be affected by
the closure of the Buzzard oil field.

Manufacturing output fell 1.3% on the month and was down 2.1% on
the year, well below the median for a monthly and yearly drop of 0.2%.

This left manufacturing down 0.7% in the three months to October
compared with the previous three months.

The main fall on the month came from Food, Beverages and Tobacco
where output fell 2.4% on the month, cutting manufacturing output by
0.31 percentage point on the month. This was mainly down to a 9.1% fall
in beer and lager output due to a lack of demand.

Pharmaceuticals output was down 4.4% on the month cutting
manufacturing monthly growth by 0.25 percentage point.

There was also a hit from coke and petroleum production where
output plunged 19.6%, knocking 0.13 percentage point off manufacturing
growth.

The wider measure of industrial fell 0.8% on the month and by 3% on
the year. Analysts had expected to see a rise of 0.8% on the month and
fall of 0.5% on the year, having wrongly predicted a large bounceback in
mining and quarrying output.

Mining and quarrying output plunged 17.7% in October due to the
closure of the Buzzard oil field. This did not reopen until November 3
and production was also hit due to problems in the middle of the month,
but there should be some bounceback expected in the November data.

In the three months to October, industrial production was down 1%,
and it looks likely that this will prove to be a significant drag on GDP
growth as a whole in Q4.

-London newsroom 4420 7862 7491 email: puglow@marketnews.com

[TOPICS: MT$$$$,M$B$$$,MABDS$]