Data reveals industrial output fails to match expectations again

THE SCALE of the economic challenge for the new government has been laid bare after official data showed Britain’s industrial output again fell short of expectations.

Figures from the Office for National Statistics (ONS) showed industrial output grew just 0.2 per cent in April, below consensus forecasts of 0.7 per cent.

Output was down 0.8 per cent year on year and the poor performance, which follows three consecutive months of falling figures, was put down to lacklustre manufacturing growth, which grew by only 0.2 per cent. Stronger energy production and factory output failed to make up for the sluggish manufacturing figures, which also missed forecasts and were flat year on year.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “April’s modest rise in industrial production reverses only a tiny fraction of the 1.8 per cent fall between December and March and so will increase concerns that the overall economy is stagnating.”

Construction output also fell month-on-month in April, the ONS said, dropping 1.6 per cent month on month, driven by falls in both repair and maintenance and new work. The figures point to a further slowdown in momentum for the UK economy following the country’s decision to quit the EU last year and come amid political turmoil after the shock General Election result.

“Looking ahead, we expect manufacturing output to revive slowly, as moderate growth in exports offsets weakness in domestic demand. Even so, industrial production is on track to barely rise at all again in Q2, ensuring that overall GDP growth struggles to better Q1’s 0.2 per cent rise,” Mr Tombs added.