Industry a bright spot for UK

• Exports jump as global upturn buoys the economy, but growth lags that of competitors and business expects a disappointing 2018

British industry enjoyed solid growth in November, benefiting from a global upturn that allowed the economy to outperform gloomy forecasts made after 2016’s Brexit vote.

British industry enjoyed solid growth in November, benefiting from a global upturn that has enabled the economy to outperform gloomy forecasts made after 2016’s Brexit vote, although the country still lags its international rivals.

The British economy grew slower than all other Group of Seven members in the first nine months of 2017 as consumerfacing sectors suffered from a surge in inflation caused by sterling’s post-Brexit vote plunge.

With departure from the EU set for March 2019, few economists think growth will improve in 2018.

But the latest official figures signalled that industry remains a bright spot. Manufacturers recorded their fastest annual growth since March 2011 in the three months to the end of November, expanding by 3.9% year on year.

The sector, which accounts for about 10% of British economic output, posted its seventh successive monthly expansion — the longest unbroken run in more than 20 years.

The National Institute of Economic and Social Research said the figures pointed to GDP growth of 0.6% in the last quarter of 2017, which would be the strongest of the year and would lift full-year growth to 1.8%. The Bank of England said in November it expected growth to stick at 0.4% in the last three months of the year, after it raised its key interest rate for the first time since 2007.

If growth turns out to be faster, it might boost the chance of the central bank raising interest rates again in May rather than later in 2018 as most economists expect.

Financial markets were unmoved by the data, however.

“The UK will need more than just strong industrial production figures if it is to fare well,” said Christian Jaccarini, an economist at the Centre for Economics and Research consultancy.

Construction output in the three months to November contracted 2% from the previous three months. It was the biggest dip since August 2012, the Office for National Statistics said.

Earlier on Wednesday, the British Chambers of Commerce said the economy looked set for an “underwhelming” 2018, with business subdued ahead of Brexit and reluctant to invest, according to its quarterly survey — the largest of its type.

The Office for National Statistics said industrial output rose Business by a monthly 0.4% in November, compared with 0.2% in October, spurring an annual rise of 2.5%.

Economists taking part in a Reuters poll had expected to see output rise 0.3% on the month and 1.8% on the year.

“There was strong and widespread growth across manufacturing, with notable increases from renewable energy projects, boats, planes and cars for export,” said Ole Black of the statistics office.

Goods export volumes in the three months to November were 9.1% higher than the same period in 2016, though the goods trade deficit exceeded all forecasts in a Reuters poll.

Other countries are doing better. German industrial output rose 3.4% in November alone, its biggest gain since 2009. It puts the economy there on track for growth of at least 2.2% in 2017.

Figures for Britain’s services sector — which is about eight times the size of manufacturing and has been growing slowly — are due out on January 26.

Wednesday’s data showed Britain’s total trade deficit, which includes goods and services, reached a five-month high of £2.8bn in November.

EXPORT VOLUMES IN THE THREE MONTHS TO NOVEMBER WERE 9.1% HIGHER THAN THE SAME PERIOD IN 2016