UK manufacturing provided a significant boost to economic growth in August, as a sharp rise in factory output helped the economy outperform expectations and avoid a contraction.
Manufacturing output increased by 1.2% month on month, according to the latest figures from the Office for National Statistics (ONS). The increase helped drive a 0.8% rise in total production output, which includes manufacturing, mining and quarrying, energy supply, and water and waste management.
UK gross domestic product (GDP) grew by 0.1% in August, defying economists’ expectations of a 0.1% contraction. Services output was unchanged over the month, while construction output fell by 0.2%.
The figures, published on 15 October, suggest manufacturing provided an important source of resilience for the UK economy, although the sector’s performance over the wider three-month period remained more subdued.
Pharmaceuticals lead manufacturing growth
Nine of the 13 manufacturing subsectors recorded increased output in August, with pharmaceutical production making the largest contribution to monthly growth. Output of basic pharmaceutical products and preparations rose by 5.1%, following a 3.4% increase in July. The subsector accounted for more than half of the overall monthly growth in manufacturing output.
Transport equipment was another positive contributor, with output increasing by 1.8% following a 1.0% decline in July. However, the gains were not universal. Output from other manufacturing and repair fell by 2.1%, while food products, beverages and tobacco declined by 1.0%.
The latest figures follow a 1.0% increase in manufacturing output in July and a 0.6% contraction in June, indicating a return to growth after the earlier monthly decline.
Quarterly picture remains mixed
Despite the strong August performance, manufacturing growth over the three months to August was modest. Output increased by 0.1% compared with the three months to May, with seven of the 13 manufacturing subsectors recording growth.
Computer, electronic and optical products made the largest positive contribution, with output rising by 3.5%. Other manufacturing and repair increased by 2.0%, while machinery and equipment output grew by 1.8%.
These gains were partially offset by a 2.7% decline in basic metals and metal products, a 2.5% fall in rubber and plastics products and other non-metallic mineral products, and a 1.6% decrease in wood and paper products and printing.
Across the wider production sector, output fell by 0.2% over the three months to August. Declines in water supply and sewerage, down 3.1%, and mining and quarrying, down 0.6%, outweighed increases in manufacturing and electricity and gas, which rose by 0.1% and 0.4%, respectively.
The broader economy nevertheless recorded growth of 0.7% over the three months to August, supported primarily by services, which expanded by 0.9%. Construction output fell by 1.0% over the same period.
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