UK manufacturing output in surprise fall

Manufacturing output in the UK recorded a surprise fall of 1.3% in May, the biggest decline since January 2013.

The figure from the Office for National Statistics (ONS) was much weaker than economists' forecasts of an increase of 0.4%.

Manufacturing data and surveys so far this year have indicated that the sector is growing robustly.

The wider measure of industrial output also fell in May, the ONS figures showed, dropping by 0.7%.

Compared with a year earlier, manufacturing output was up 3.7% in May, down from April's increase of 4.3%, while annual growth in industrial output slowed to 2.3% from 2.9%.

May's decline in output echoes a similar stutter in German industrial production, which fell 1.8% in May, figures released on Monday showed.
'Puzzling'

David Tinsley, UK economist at BNP Paribas, described the results as a "heavy dose of reality" after a run of upbeat economic data.

"It is quite possible that the fall today reflects some erratic/seasonal influences," Mr Tinsley said.

"It is noteworthy that German industrial production was similarly surprisingly weak yesterday. It could be production plans were affected by the relative lateness of Easter."

Jeremy Cook, chief economist at currency company, World First, said the results were "puzzling".

"This is the first decline in six months for UK factory output and calls into question just how strong the balancing act of UK growth really is."

In May, the Bank of England predicted that the UK's economic growth would begin to slow in the second half of 2014, but governor Mark Carney said recently there were few signs of this happening.

The pound fell slightly following the release of the manufacturing figures, as markets saw less chance of an interest rate rise before the end of the year.

http://www.bbc.co.uk/news/28209578

What UK Growth?

Growth is really shown by the trade figures and we are still in deficit, which is getting worse, the last figures are up to April 2014, next ones due end of July:

UK Trade Deficit Widens Sharply in April

UK's trade gap on goods and services increased to £2.5 billion in April 2014, compared with £1.1 billion in March 2014, as exports to countries outside the European Union declined and imports grew slightly.

Between March and April, total exports (including goods and services) decreased to £40.66 billion. In the same period, exports of goods decreased by 4.4% (an estimated £1.1 billion) to £23.4 billion. However Revenue and Customs have informed ONS that through routine quality assurance, omissions have been identified resulting in exports of oil being underestimated by about £700 million. If this £700 million is taken into account the goods and services deficit stands at £1.8 billion in April 2014 (instead of £2.5 billion) and the goods deficit was £8.9 billion (instead of £9.6 billion). This error was identified too late to incorporate into April data.

Between March and April, total imports rose to £43.2 billion. In the same period, imports of goods increased by 0.8% to £33.0 billion. The rise reflects increases in almost all key commodities, notably imports of food, beverages and tobacco which rose by £0.1 billion between March and April. Imports of manufactured goods were generally quiet in April, rising marginally from March due to several offsetting movements at a lower commodity level. Imports of ships was the most significant increase at this level with a monthly movement of £0.2 billion. This was attributed entirely to trade with countries outside the EU where the import level of ships reached a record high of £0.3 billion in April 2014.

In April 2014, exports of goods to the European Union (EU) decreased by £0.5 billion, but this all related to the underestimation of oil exports mentioned above. Imports from the EU increased by £0.4 billion to £17.5 billion, reflecting increases in imports of manufactured goods (specifically chemicals) and food beverages and tobacco.

In April 2014, exports of goods to countries outside of the EU decreased by £0.5 billion to £11.7 billion, due mainly to widespread falls in exports of manufactured goods. Imports from countries outside of the EU decreased by £0.2 billion to £15.5 billion, reflecting falls in imports of manufactured goods and fuels.

6/6/2014 10:40:20 AM

http://www.tradingeconomics.com/united-kingdom/balance-of-trade

But how is this possible - we have the EU to protect against all of this?!

EU can only do so much when you have a crap government that won't put enough into growth.

From all he other stats I see the UK s doing very well. In Canada we faced the wall over a decade ago and govt across the board was cut back to manageable proportions.

We have done very well since. Are you saying that the current government should have carried on spending like the last.

My understanding is that it didn't work in the UK nor has it worked elsewhere.

You have to live within your means its as simple as that.

canada lad wrote:From all he other stats I see the UK s doing very well. In Canada we faced the wall over a decade ago and govt across the board was cut back to manageable proportions.

We have done very well since. Are you saying that the current government should have carried on spending like the last.

My understanding is that it didn't work in the UK nor has it worked elsewhere.

You have to live within your means its as simple as that.

Welcome, canada lad!

It looks to me that the current UK government has carried on spending pretty much exactly like the last, just not growing as fast:

The current government isn't spending like the last Benji.

From my understanding reading the left wing press you would think the cuts have been draconian. Indeed your left wing posters on here suggest the same. I agree the cuts are not nearly deep enough and not anywhere near those we made in Canada.

My point is the Socialist here and in the UK suggested the cuts shouldn't have happened they should and it is clear they did us proud.

The big lie is that the UK government hasn't made all the cuts it should not that they have been too draconian. The left are dumb enough to believe their own nonsense.

The only difference between a Labour or Conservative government next time is that the cuts will be much deeper under Labour. Their lack of credibility on Economic matters is so bad they will run into difficulty from day 1.

The Tories have yet to come clean and really make the Brits smell the coffee.

Of this I am sure.

Hello Drinky, got yourself a roving IP?

BigAndy9 wrote:The current government isn't spending like the last Benji.

You are quite right, it is spending more and less effectively.