United Kingdom industrial output rises but manufacturing still weak

Industrial output rose by a monthly 0.4% in May, beating all forecasts from economists in a Reuters poll who had predicted a drop of 0.2%.

A rise in oil and gas output boosted United Kingdom industrial production in May, official figures show, but manufacturing output continued to fall.

But the news was not all good. Experts had expected an increase of just 0.1 per cent, which builds on a rise of 0.4 per cent the previous month.

But the wider industrial production sector rose by a better-than-expected 0.4 per cent in May, boosted by a rise in output in mining and quarrying.

David Kern, Chief Economist of the British Chambers of Commerce, said: “Longer term comparisons show that both manufacturing and total industrial production are still well below their pre-recession levels in Q1 2008, in contrast to the thriving services sector. While output shrank on the month, however, it is up on the year, driven by robust growth in other transport and pharmaceutical sectors”.

George Osborne is expected to announce more help for manufacturers in his Budget announcement on Wednesday.

Meanwhile, the production of intermediate goods recorded a decrease of 0.2 percent, while energy production decreased by 3.1 percent and construction saw a decline of 0.5 percent, all month on month.

“Although manufacturing is coping with very hard global circumstances, the sector is facing serious structural problems”.

United Kingdom manufacturers have struggled to make much headway in recent months due to a combination of weak demand in Europe and the strengthening of the pound against the euro currency.