UK production output at highest for a decade

Posted on 11 Jan 2018 by Jonny Williamson

The three-month rolling average of the Index of Manufacturing reached 104.9 in November 2017, the highest since April 2008, new figures have shown.

UK production output has reached its highest for a decade, according to ONS – image courtesy of Depostphotos.

The Index of Manufacturing, released by the Office for National Statistics (ONS), took data from more than 75,000 businesses across 64 industries, on top of the returns from the 6,000 sample each month from the Monthly Business Survey.

The Index measures the volume of production at base year prices for the manufacturing, mining and quarrying, energy supply, and water and waste management industries.

The Index’ main insights regarding the manufacturing sectors were:

  • Following a weaker period earlier in the year, production output increased by 1.2% in the three months to November 2017, in line with the figures recorded in recent months
  • Manufacturing has shown similar signs of strength with output rising by 1.4% in the three months to November 2017, the largest three-month growth rate since February 2017, contributing 1.0 percentage point towards growth in total production
  • The increase in manufacturing output was wide-spread, with 12 of the 13 industries growing in the three months to November 2017
  • Manufacturing output was 3.9% higher in the three months to November 2017 compared with the same three months in 2016, which is the strongest rate of growth since March 2011; on this basis, growth has now been above 3% for four consecutive three-months-on-a-year periods, which is the first time since June 2011
  • Production output rose by 0.4% in November 2017, driven primarily by 3.2% growth in energy supply and 0.4% growth in manufacturing; this is exactly in line with market expectations
  • Manufacturing output increased for the seventh consecutive month, for the first time since February 1997; this is slightly above market expectations of a rise of 0.3%
  • Without other revisions, total production output would need to fall by 3.1% in December 2017 for quarterly growth in Quarter 4 (Oct to Dec) 2017 to be zero (to one decimal place)

Lee Hopley, chief economist at EEF, said, as reported by City A.M.: “A quick check in the review mirror confirms that UK manufacturers were, in the main, in good shape as in 2017 came to a close, with the majority of sub-sectors enjoying growth.

“Exports continue to pick up with the pace of growth in goods headed overseas outpacing the rate at which we are sucking in imports, enabling us to start chipping away at our sizeable trade deficit.”