UK factory output unexpectedly falls for second month

LONDON: UK manufacturing output unexpectedly declined for a second month, indicating the economy’s return to growth may be uneven.

Factory output fell 1% from January, the most since April, the Office for National Statistics said yesterday. The median forecast of 24 economists in a Bloomberg News survey was for an increase of 0.1%.

Manufacturing, which accounts for 10% of the economy, was revised to a 0.3% decline in January from a 0.1% increase.

Reports this week showed expansion in services, manufacturing and construction accelerated in March, suggesting the economy probably returned to growth in the first quarter. Still, the British Chambers of Commerce said the recovery remained “weak”.

“There are signs that things are turning around for manufacturers, but it’s going to be a long, slow haul,” Peter Dixon, an economist at Commerzbank AG in London, said before the data were published. “Large parts of the eurozone aren’t going to be recovering quickly and that will constrain manufacturers’ recovery.”

The pound sterling fell as much as 0.1% against the dollar after the report. It traded at US$1.5875 as of 9.33am in London, down 0.1% from Wednesday.

Within manufacturing, nine subsectors declined in February from January, three rose and one was unchanged. The decline was led by transport equipment, rubber and plastic products, and textiles. From a year earlier, factory output fell 1.4% in February.

Severfield-rowen Plc, the supplier of structural steelwork to Heathrow Airport and the Shard skyscraper in London, said on March 20 that the United kingdom had “limited growth prospects”.

Overall industrial output, which accounts for about 15% of gross domestic product (GDP), rose 0.4% in February from January, matching economists’ estimates, and was down 2.3% from a year earlier.

The main risers were mining and quarrying, oil and gas extraction, and utilities such as electricity and water.

In the three months through February, manufacturing rose 0.2% compared with the previous three months, while industrial production declined 0.5%.