Tough winter looks on the cards for manufacturing sector

BRITAIN’S factories saw output ease back in October in the latest sign that the manufacturing sector is set to endure a tough winter.

Official figures revealed that manufacturing output dropped by 0.4% month-on-month in October, worse than expected and a sharp reversal of the 0.9% rise in September. The Office for National Statistics (ONS) said activity in the sector was also down on an annual basis, falling by 0.1%.

The figures come after manufacturing industry group the EEF said on Monday that manufacturers were enduring a “difficult end” to a tough year amid mounting gloom over the global economy.

And last week’s CIPS/Markit purchasing managers’ index (PMI) survey came as a disappointment, showing a reading of 52.7 in November, down from 55.2 the previous month.

The data comes ahead of the Bank of England’s monthly decision on interest rates on Thursday, with policymakers expected to hold the cost of borrowing at 0.5%.

David Kern, British Chambers of Commerce chief economist, said: “It is disappointing that manufacturing has again declined, following an improvement the previous month.

“There are still major challenges facing the sector, particularly in the face of worsening global circumstances and the strength of sterling.”

But Martin Beck, senior economic adviser to the EY ITEM Club, said growth in the powerhouse services sector should help support a pickup in the overall economy in the fourth quarter.

He said: “October’s industry data reaffirms our view that GDP growth is likely to accelerate slightly in the fourth quarter, running at 0.6% compared to the 0.5% seen in the three months to September.”

The ONS revealed the biggest fall in manufacturing activity came in the sector covering other manufacturing and repairs, which saw a 5.4% fall.

But overall industrial production output grew by 0.1% month-onmonth in October and 1.7% compared with a year earlier.