Statistics released by the Office of National Statistics today show an unexpected slump in manufacturing in May, suggesting that the economy may be struggling to maintain momentum.
The findings show production output has grown by 2.3% between May 2013 and May 2014, with manufacturing the largest contributor, having increased by 3.7%.
However, total production output decreased by 0.7% from April to May, with the manufacturing sector decreasing by 1.3%, representing its first decline in total output for six months.
News of a slump was met with surprise by industry analysts, who had predicted the median forecast as 0.4% in output in a survey of 35 economists by Bloomberg.
The sterling fell against all but one of its 16 major peers, down from $1.7135 to $1.7092 immediately after the figures were released.
Chris Sumner, managing director of the robotics manufacturer FANUC UK, said that the figures were not a cause for concern, emphasising the year-on-year growth in production output, particularly in manufacturing.
“British manufacturing is booming. As we enter the traditionally quiet summer period UK factories are showing a robust output level matched by strong order books.
Mr Sumner added: “We are seeing a particular jump in orders from the automotive sector, as companies seek to kit out both new and existing plants for higher capacity production.
“It is clear that the UK’s recovery is being fuelled by strong industry, hand-in-hand with the housing market and consumer credit.”
EEF, the manufacturers’ organisation, emphasised the limited usefulness of monthly figures.
In a statement, it said: “This brings to an end a very strong run of data and serves as a reminder that manufacturers continue to face a number of headwinds, not least subdued external demand across Europe, which continues to weigh on export prospects.
“Monthly production data can be volatile and the dip in May contrasts with other positive surveys and healthy domestic order expectations.
“Despite the dip, manufacturing remains on track to expand for a fifth consecutive quarter, and anecdotal evidence from across the sector continues to point to solid momentum over the second half of the year.”
