–Oct manufacturing output -0.7% m/m; +0.3% y/y
–Oct industrial production -0.7% m/m; -1.7% y/y
LONDON (MNI) – Manufacturing output plunged on the month in October
making it more likely that overall economic growth in the final quarter
of the year will turn negative, figures released by National Statistics
showed Wednesday.
Manufacturing output fell 0.7% on the month and was up only 0.3% on
the year, well below the median forecast for a decline of 0.2% on the
month and rise of 1.5% on the year. Barring a sharp bounceback in output
in the next two months, something survey evidence suggests won’t happen,
output looks set to fall in the fourth quarter compared with the third.
Within manufacturing there were sharp falls in the output of basic
metals which cut monthly growth by 0.3 percentage point. Other
manufacturing and repair and pharmaceuticals both cut growth by 0.2
percentage points.
The wider measure of industrial production also fell by 0.7% on the
month and was down 1.7% on the year, compared with the median for a 0.3%
and 0.7% fall respectively.
While output of the utilities industries fell 4.9% due to the
record warm weather during the month, this was offset by a sharp rise in
oil and gas production following a decline last month. Warmer weather
continued to some extent in November and it is unlikely gas and
electricity will bounce back fully.
Recent survey evidence on the manufacturing sector has worsened
significantly, with the PMI measure falling to 47.6 in November, its
lowest level for two and half years.
The Bank of England’s latest Inflation Report forecast growth to
flat-line over the next three quarters and this latest data add weight
to this view and point to a possible worse outturn.
Much, though, will depend on the service sector which accounts for
a far larger weight in GDP, with the latest PMI survey showing a modest
pick up but still pointing to very weak growth.
–London newsroom 4420 7862 7491 email: drobinson@marketnews.com
[TOPICS: MT$$$$,M$B$$$,MABDS$]
