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Wednesday 16th of February 2011
February 11, 2010    

UK factory output sees strong December growth

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by Kay Murchie

The Office for National Statistics (ONS) revealed UK factory output grew more than expected in December, boosting hopes of an upward revision to the initial estimate of fourth quarter GDP figures.

According to the ONS, output increased by 0.9% in December after strong gains in the transport, paper and publishing and electrical and optical equipment sectors.

Meanwhile, the broader measure of industrial production also grew by 0.5% - exceeding expectations and was the fastest pace since September 2009.

Last month, official figures revealed that the UK economy grew by just 0.1% between the October and December period.

While the data suggested that the economy had emerged from recession. the figures disappointed economists who had expected that the economy would grow by around 0.4%.

Jonathan Loynes from Capital Economics said: “December’s UK industrial production figures will raise hopes of a small upward revision to Q4 GDP growth.

“Perhaps more importantly, the numbers provide hope that the recovery in the manufacturing sector is picking up some steam again after stalling a bit over the previous few months,” Mr Loynes added.

Meanwhile, the British Chambers of Commerce said: “These figures are stronger than expected and reinforce hopes that 2009′s fourth quarter GDP growth will be revised upwards - possibly by even more than the ONS has indicated.”

Earlier this week, the National Institute of Economic and Social Research (NIESR) suggested that the UK economy grew faster in the three months to January.

The leading economic think tank said GDP expanded by 0.4% over the three-month period.

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