Engineering news
UK industrial production grew by less than expected in January, as a pickup in manufacturing activity was offset by a slump in North Sea oil and gas production, according to data from the Office for National Statistics (ONS).
The statistics show that industrial production in the UK rose 0.3% in January, and just 0.2% higher than a year earlier, missing the estimated rise of 0.55%.
The monthly increase in manufacturing in January followed three months of declines and was led by a category that includes sporting goods, jewellery and games and toys.
Despite this, there were increases in three of the four main sectors, with manufacturing (the largest component of production), having the largest positive contribution, increasing by 0.7%, bettering the estimate of 0.2%.
The pickup in manufacturing activity was offset by a 6.3% slump in oil and gas production, the biggest drop since June 2014, which dragged down overall industrial performance.
Mark Stephenson, UK manufacturing industry leader at Deloitte, said: “The challenges UK manufacturers are up against should not be underestimated. Slow global economic growth, weak Chinese trade data, downgraded UK growth forecasts, turmoil in the steel industry and the PMI at its lowest point for almost three years, are just some of the factors at play.
“Therefore today’s manufacturing output figures show how resilient the industry is and signals the prospect of a more positive year ahead for UK manufacturers. This week’s EEF survey highlighted that firms expect modest growth in the coming months, and a weakened pound should boost many exporters.”
Also commenting on the data, Lee Hopley, chief economist at the EEF, said: “Manufacturing output bounced back with the gains reasonably broad based across the sector. While this is consistent with the improving sentiment we've seen since the start of the year, it's premature to call this a turning point for the sector.
"We've got decent consumer demand and a more competitive exchange rate providing a supporting role, but the major challenges of low commodity prices, emerging market weakness and elevated uncertainty are still very much in play at the start of 2016.”