Manufacturing output drops again

Posted on 9 Feb 2009 by The Manufacturer

Official figures from the Office for National Statistics (ONS) have unsurprisingly confirmed the continuing downward trend for manufacturing output in the UK.

It decreased 5.1 per cent in quarter four of 2008 with all but one of thirteen sub-sector contributing to the fall.

Again unsurprisingly, given recent headlines, the two biggest sub-sectors to suffer were basic metals and metal product industries (down 9.4 per cent) and transport equipment industries (down 7.7 per cent).

The fall for November to December was 2.2 per cent; compared with a near-record 2.9 per cent in the month period before.

Commenting on the latest figures, Ray O’Donoghue, head of UK manufacturing at Barclays, said that while the figures may make for “bleak reading” the fact that the declines are contracting is an optimistic development and he said some firms will now be looking to invest where they see “opportunity amongst the volatility”.

“The lower monthly rate of decline in December compared with last month’s near record decrease means the manufacturing sector is broadly in line with the US, where manufacturing figures show sector contraction is easing,” he said.

“Although many businesses will continue to experience difficulty, declining input prices, reduced energy costs and favourable exporting exchange rates should also bring British manufacturers some cheer amidst a backdrop of negative news.”

In a separate release, the ONS confirmed factory-gate output price annual inflation fell to 3.5 per cent in the first month of 2009. The annual inflation for input prices was down to 2.3 per cent in January compared with 3.5 per cent in December 2008.