Manufacturing output in June surges at highest rate since 2010

Posted on 6 Aug 2013

Manufacturing hit back in the second quarter as total production output was 1.2% higher in June compared with June 2012 while manufacturing overall rose by 0.7% between Q1 and Q2.

The Office of National Statistics today backed up the mood in industry that manufacturing is leading a modest economic growth spurt.

Production output of all goods and services inc construction rose by 0.6% between Q1 2013 and Q2 2013, while manufacturing rose by 0.7% over the same period, ONS figures showed.

Manufacturing made by far the biggest contribution to the quarterly growth in production, which increased by 0.7% following a decline of 0.2% in Q1 2013, as all sectors of manufacturing recorded output rises.

Total production output was 1.2% higher in June 2013 compared with June 2012, reflecting a 2% rise in manufacturing.

Production rose by 1.1% between May 2013 and June 2013. Manufacturing rose by 1.9% with the ONS reporting increases in all of its sectors.

“Today’s figures show an improving trend in the manufacturing sector which chimes with other economic data being seen,” said head of manufacturing at Barclays, Mike Rigby. “The near-term outlook is looking more positive than the first half of the year, with the potential for certainty over UK interest rates and Eurozone stability helping to spur confidence. “

Industry body EEF emphasised that all sub-sectors of manufacturing had contributed to the pick-up.

“Manufacturing output has posted the strongest pace of increase since the end of 2010,” said Lee Hopley, EEF’s chief economist. “In contrast to the significant sector divergence we’ve seen in the data in recent years all parts of manufacturing posted gains with chemicals, electrical equipment and transport showing particular strength over the past three months.”

She added that the data “gives further weight to the view that manufacturing activity will continue to gain pace, becoming a more important contributor to growth in the year ahead.”

Part of the manufacturing story is strong sales of UK-made cars, where figures from the Society of Motor Manufacturers and Traders today showed a 12.7% increase to 162,228 units compared with July 2012.

David Raistrick, UK automotive leader at Deloitte, said “With European new car sales, excluding the UK, reporting a 9.8% reduction for the first six months of the year, the strength of the growth in the UK car market stands out as a phenomenal success story with seventeen months of successive growth.

“Admittedly, the growth has been achieved against the relatively depressed post 2007 years and overall sales are not anticipated to reach the pre-recession level of 2.4 million this year.”