Manufacturing in largest period of growth since 1994 in UK

  • December 08, 2017

UK manufacturing has risen for the sixth successive month, with a 0.1% rise marking the best performance for at least 20 years and underlining a healthy upward momentum in British economy.

The underlying strength is evident, as auto exports and pharma outputs soar, Britain’s car factories are helping to drive the longest unbroken period of manufacturing growth since 1994.

On a yearly basis, industrial production growth accelerated to 3.6% from 2.5% in September. This was the fastest growth so far this year, and production was expected to climb 3.5%.

Economists also forecast a rise of 3.8% in manufacturing output, and it actually improved from 2.7% in September to 3.9%. Exports of cars were almost 18 per cent higher in October than a year earlier, thanks to a 4.6% jump in car production.

Car manufacturers increased production by 6.3% in October compared with the same month a year ago, driven by an increase in export turnover. Firms recorded the highest ever value of exports of motor vehicles trailers last month.

The UK trade deficit with the rest of the world widened slightly in October, but exports grew, signalling that a more competitive pound post-Brexit is having a positive impact.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Past experience suggests that the impetus to growth in manufacturing output from the weaker exchange rate will fade soon, now that 18 months have passed since the biggest decline in sterling”.

The ONS senior statistician Kate Davies however gave a more upbeat assessment of the outlook for manufacturing, as business surveys show factories are enjoying demand from a surging European economy.

“While manufacturing was relatively subdued overall in October 2017 despite record production of cars destined for export, the longer-term picture is one of strong growth,” she said.

David Lewis, managing director, integra people, warrington

 
 
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