Sharp fall in UK factory output

Written By Unknown on Jumat, 07 Desember 2012 | 19.21

7 December 2012 Last updated at 05:54 ET

UK manufacturing output in October fell at its fastest rate since June, official figures show.

Output fell by 1.3%, the Office for National Statistics (ONS) said, with food and drink output particularly low because of reduced demand for beer.

Compared with a year earlier, output was down by 2.1%.

Both falls were the worst since June this year, when economic activity was depressed by extra public holidays for the Diamond Jubilee.

The figure for the wider measure of industrial output, which also includes energy production and mining, was down 0.8% in October, after falling 2.1% in September.

The seasonally adjusted index of production fell by 3% in October 2012 compared with a year ago, the 19th consecutive monthly fall on the same month a year ago.

The figures were worse than economists had expected.

"Very disappointing - triple dip (recession) here we come," said Alan Clarke at Scotiabank.

"Manufacturing was diabolical. Sadly, I think there is not a lot to suggest that it is temporary. Survey data has been fairy downbeat."

Potential

The chief economist at the British Chambers of Commerce, David Kern, said the industrial production figures were "bleak", and added it was clear that "the manufacturing sector is facing major obstacles to a sustainable recovery".

However, he said there were reasons to be confident about the sector's prospects.

"Manufacturing is still a significant sector of our economy and is still benefitting from a competitive exchange rate, not withstanding sterling's rise over the past year... the sector is well-managed, and has the potential to recover."

Oil and gas extraction fell in the month at the fastest rate since records began in January 1998, although that was partly due to maintenance works, which included the temporary shutdown of the largest oil field in the North Sea.

The news comes in the same week as the government's Autumn Statement, which said the economy would shrink this year, rather than expand, as had first been predicted.


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