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07th of July 2011
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UK manufacturing output recovers in May

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by Kay Mitchell
”UK

The Office for National Statistics (ONS) has today revealed UK industrial output grew at its fastest rate since March 2010 last month after plunging in April due to the Royal Wedding and the impact of Japan’s earthquake and tsunami, which disrupted the supply chain.

April’s fall represented the biggest since August 2009.

However, output rose 1.8% in May exceeding forecasts of a 1% rise – the fastest in over a year.

Meanwhile, the wider measure of manufacturing output gained 0.9% - albeit lower than expectations – and the slower growth was attributed to a sharp fall in oil and gas.

The manufacturing sector, which accounts for around 13% of economic output, has been one of the bright spots in the UK economy, however, today’s data will not alter the view that the Bank of England will keep interest rates on hold.

In related news, the Chartered Institute of Purchasing and Supply (CIPS)/Markit manufacturing purchasing managers’ index (PMI) last week revealed UK manufacturing activity grew at its slowest rate in almost two years in June.

The closely-watched CIPS/Markit manufacturing PMI dived to a 21-month low of 51.3 last month from May’s reading of 52.

June’s reading was slightly lower than the 52.1 expected by analysts.

However, the index remains just above the crucial 50 mark, which indicates expansion and it has been above this level for almost two years.

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News posted: July 7, 2011

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