Manufacturing output is up and down

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Manufacturing News, Source : The Manufacturer
Published : 22 Aug 2005 10:41

Latest government figures show that manufacturing output rallied a little in June but registered another, albeit slower, quarterly fall during the second three months of the year.

Manufacturing output decreased by 0.3 per cent in the second quarter of 2005 compared with the previous quarter, with eight out of its 13 subsectors showing decreases in output and five showing increases. In the previous quarter to May it had dipped a more dramatic 1.9 per cent.

According to the figures from the Office for National Statistics, there were significant decreases in output in the paper, printing and publishing industries, where output decreased by 2.8 per cent and in the coke, refined petroleum and nuclear fuel industries, where output decreased by 7.7 per cent. The only significant increase in the quarter came in the food, drink and tobacco industries where output increased by 2.4 per cent.

For June alone, however, manufacturing output increased by 0.2 per cent - a little better than expected, with output rising in eight of the 13 subsectors. Within this fairly flat picture there were two significant increases and two significant decreases. The biggest increases were in the food, drink and tobacco industries (1.5 per cent) and the chemicals and man-made fibres industries (1.9 per cent). The significant decreases were within the transport equipment industries (1.8 per cent) and the basic metals and metal products industries (1.7 per cent).

The manufacturers' organisation EEF has believed for some time that the official data continues to overestimate the slowdown in manufacturing. Ahead of this week's interest rate meeting it polled each of its 11 regions across the UK to ask if they would describe manufacturing in their region as being in recession. "Not a single one said they would use that term," said a spokesman.

Of this month's figures, EEF chief economist, Steve Radley, said: "These figures confirm our view that manufacturing is experiencing a slowdown rather than outright recession As such, the pace of any further rate cuts should continue to be measured."

Andy Martin, National Director of Manufacturing at Barclays, believed the figures painted a mixed picture. "While confidence in the manufacturing sector may be down, the small monthly uplift is positive and proves the sector’s overall resilience," he said. "Manufacturers will be heartened by the interest rate cut - they now need to keep the faith. The sub-sector figures also provide some welcome news, particularly for the food and chemical industries."

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