Engineering news
Manufacturing output decreased by 0.4% in October, pointing to a weak start for industry in the fourth quarter.
In its Index of Production, the Office for National Statistics (ONS) said that the largest contribution to the decreases came from 'other manufacturing & repair', which decreased by 5.4%.
The total production output is estimated to have increased by 1.7% in October 2015 compared with the previous year. There were also increases in three of the four main sectors, with mining & quarrying output being the largest contributor, increasing by 8.5%.
However, manufacturing output decreased by 0.1% in October 2015 compared with October 2014. The ONS said the largest contribution to the decrease came from “the manufacture of machinery & equipment not elsewhere classified”, which decreased by 15.3%.
Total production output in October 2015 is estimated to have increased by 0.1% compared with the previous month. There were also increases in three of the four main sectors, with the largest positive contribution coming from the water supply, sewerage & waste management output, which increased by 1.7%.
The ONS said that the over the past two years the manufacturing industry had experienced low price inflation as well as a prolonged period of deflation “both in terms of the prices manufacturers pay for materials and fuels used in the production process (input prices) and the prices they charge for the goods they produce output prices” over the past two years. In particular the firm pointed to the cost of crude oil.
Zach Witton, deputy chief economist at EEF, the manufacturers’ organisation, said: “Today’s data marks a disappointing start to the final quarter of the year, with the lingering impact from the crude oil price on investment in the North Sea dragging some sectors down. Yet there was divergence across sectors, with pharmaceuticals benefiting from the recent end of the patent cliff, and solid domestic demand continuing to support motor vehicles.
“Looking forward, industry will remain under pressure from the low oil price and weak export demand flowing from slower growth in emerging markets. While the Chancellor’s recent Spending Review will have been seen as supportive to manufacturing, today’s data highlights that it is critical government continues to act to ensure the UK is a competitive location for manufacturing.”