British manufacturing records strongest output since 2008

 
Jasper Jolly
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Manufacturers have enjoyed a stronger world economy and a cheaper pound (Source: Getty)

The British manufacturing sector produced its highest output since before the financial crisis struck at the end of last year, continuing their run of impressive growth over recent months.

The three-month rolling average of the index of manufacturing reached 104.9 in November 2017, the highest since April 2008, when it was 105.5, according to the Office for National Statistics (ONS).

Manufacturing grew by 3.5 per cent year-on-year in November, above the consensus estimate of 2.8 per cent, although the rate of growth slowed from the 4.7 per cent seen in the previous month.

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The broader index of production, which also incorporates mining activity and the oil sector, grew by 2.5 per cent year-on-year in November, also above consensus expectations although slower than the previous month.

Industrial production has now increased for eight months in a row, the first time this has been achieved since 1994, according to Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

Manufacturers have benefited in the last 18 months from the steep fall in the value of sterling after the EU referendum, which has made their products relatively cheaper in foreign currency terms, allowing them to raise profit margins.

Read more: Christmas cheer for UK manufacturers with order books at highest since 1988

The ongoing upturn in the global economy, and a particularly strong recovery in the key EU market, has also boosted production, while there has been no change to trading conditions thus far.

Lee Hopley, chief economist at manufacturing lobbying group EEF, said: “A quick check in the rear-view mirror confirms that UK manufacturers were, in the main, in good shape as 2017 came to a close, with the majority of sub-sectors enjoying growth.

“Exports continue to pick up with the pace of growth in goods headed overseas outpacing the rate at which we’re sucking in imports, enabling us to start chipping away at our sizeable trade deficit.”

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