Shock fall in UK industrial output

Output in Britain’s manufacturing and construction industries unexpectedly fell in May.

Figures from the Office for National Statistics (ONS) showed manufacturing output had fallen 0.2% month-on-month in May, down from 0.2% growth in April and below economists’ expectations.

The construction industry also endured a difficult month, failing to reverse April’s decline by dropping 1.2% in May against forecasts of 0.5% growth.

Industrial production output – which includes areas such as manufacturing, mining and quarrying, and energy and water supply – dropped 0.1% over the period when it was predicted to expand by 0.4%.

While manufacturing’s lacklustre performance proved the biggest drag, the ONS said a 0.8% drop from energy supply had also pushed industrial production lower.

Samuel Tombs, of Pantheon Macroeconomics, said the data increased the likelihood of the Bank of England’s Monetary Policy Committee will keep interest rates on hold.

He said: “May’s industrial production figures provide more evidence that GDP growth has not sped up in Q2, increasing the likelihood that the MPC stands pat next month.

“The fall in production partly reflected a 0.8% month-to-month fall in output in energy supply sector, due to unusually warm weather; average temperatures were 1.8 degrees Celsius above their 1970 to 2016 May average.

“But manufacturing output also fell by 0.2%, reversing April’s increase.

“The flat trend in manufacturing contrasts with the bullish picture painted by surveys recently, although it is not unusual for the latter to be misleading.”

Picture: Getty. UK manufacturing output fell in May.