Total production output in January 2015 is estimated to have increased 1.3% over January 2014, according to the Office of National Statistics (ONS), with manufacturing once again being the largest contributor with an almost 2% rise.
The Index of Production (IoP) figures released today show increases in eight of the 13 manufacturing sub-sectors compared with a year ago, and the largest contributor was the manufacture of transport equipment, increasing by 6.1%.
Though there were increases in two of the main sectors – with a 2% increase making mining & quarrying output the largest contributor, total production output decreased by 0.1% in January 2015 compared with December 2014.
Manufacturing output decreased by 0.5% in January 2015 compared with December 2014, due to a decrease from the manufacture of computer, electronic & optical products; the manufacture of machinery & equipment not elsewhere classified; and the manufacture of food, beverages & tobacco.
Compared to the pre-downturn peak in Q1 2008, the three months to January 2015 saw production and manufacturing 10.4% and 4.8% respectively below their previous figures.
Chief economist at EEF, Lee Hopley noted that the fall shouldn’t be of concern, as other business surveys point to “positive underlying momentum in manufacturing;” adding that there’s a strong degree of “sectoral divergence which is very much an oil and gas story.”
“Whereas those sectors in the supply chain – such as mechanical and electrical equipment sectors – have seen output fall as investment projects have been cancelled or postponed. Those which use oil products as an input to production such as chemicals and rubber and plastics have enjoyed a boost.
Hopley added: “Overall we’re still expecting robust growth in manufacturing this year as global uncertainty levels out and expectations among most manufacturers remain strong.
“EEF is currently projecting 1.7% growth this year in manufacturing.”
Head of manufacturing at Barclays, Mike Rigby commented: “Although manufacturing output started the New Year with a bump, the growth of output and new orders for the sector continue to tick higher year on year.
“However, with access to labour increasingly becoming an issue for many manufacturers, now would be an opportune time to up-skill existing staff to help meet demand in 2015.”