Engineering news
The biggest decline in manufacturing output for two years helped make the second quarter one of sluggish economic growth, according to the latest figures from the Office for National Statistics (ONS).
Total production output decreased 1.6% in the second quarter of 2011, compared with a decrease of 0.1% in the previous quarter, the ONS said. The largest contribution to the decline was from mining and quarrying.
Mining and quarrying decreased by 6.8%, compared with a decrease of 1.8% in the previous quarter. Manufacturing decreased by 0.5% compared with an increase of 0.7% in the previous quarter.
Economic recovery slowed to GDP growth of 0.2% in the second quarter, compared to 0.5% in the first quarter of 2011.
But the ONS reiterated that a number of seasonal factors, such as the royal wedding and the unusually hot spring, clouded the picture, and real growth could be up to 0.5 percentage point higher as a result.
Samuel Tombs, UK economist at Capital Economics, said the third quarter has the potential to be stronger as the temporary factors flagged by the ONS unwind.
However, he added: "With the forward-looking indicators for the third quarter remaining downbeat and recent stock-market turmoil clouding the outlook, we strongly doubt that any small pick-up in GDP growth in the third quarter will reignite the recovery."
The overall second quarter growth figure was unchanged on the previous month's estimate, despite a greater than previously thought 1.6% decrease in output in manufacturing. This was the biggest fall since the first quarter of 2009 and was caused as food and transport equipment production was lower than previously expected.
There had also been the biggest falls in mining and quarrying output since 2006, while electricity, gas and water supply also fell, partly as a result of the hot weather in April.
The figures mean UK output has grown 0.7% year-on-year as it struggles to gain momentum following the recession and amid the government's austerity cuts.
Output has effectively flatlined in recent months after the 0.5% growth in the first quarter of 2011 merely offset a decline of 0.5% in the final quarter of 2010.
Manufacturers' organisation the EEF will release its latest quarterly trends survey in September.