British manufacturing output continued to show improvement on its 2010 results but fears have been raised following June's reduction compared with the previous month.
Total manufacturing output increased by 2.1% in June 2011 compared to the same month a year ago although between May and June 2011, manufacturing output decreased by 0.4%.
Over the 12 months to June, output increased in eight of the 13 sub-sectors and fell in five sub-sectors. The largest contributors to the increase were the electrical and optical equipment industries which increased by 7.6%, the transport equipment industries which increased by 5.6% and the machinery and equipment industries which increased by 6.1%. The largest negative contribution to overall output was a decrease of 3.2% in the chemicals and man made fibres industries.
Between May and June 2011, manufacturing output decreased by 0.4 per cent. Output decreased in eight of the 13 sub-sectors and fell in five sub-sectors. The largest contributors to the decrease were the transport equipment industries which decreased by
1.7%, the paper, printing and publishing industries which decreased by 1.2% and the chemical and man made fibres industries which decreased by 1.1 per cent. The largest positive contribution to overall output was an increase of 4.1% in the textiles and leather clothing industries.
“These figures failed to deliver much positive news despite some sectors bucking the downward trend,” said Lee Hopley, chief economist at EEF, the manufacturers’ organisation. “While production is still firmly up on a year ago, we are picking up some clear signs that confidence is quickly ebbing away, given growing concerns over debt and the prospect of a slowdown in global growth.”
The decrease in the industrial sector added to a collection of poor UK economic news. The FTSE 100 index in London fell 5.5% yesterday after the data was released, and was trading 106 points lower at 4963 at 11:05am yesterday, a fall of 2%. This morning the pound had weakened against both the dollar and euro.
Mervyn King, governor of the Bank of England, will announce new growth and inflation forecasts today, his first comments since the US lost its AAA credit rating last week.