DESPITE strong signals that growth will be robust in the third quarter of the year, the industrial production of UK firms fell by 1.1 per cent in August, when compared to July.
While the quarter has seen some of the best purchasing managers’ indexes (PMI) on record from the sector, the Office for National Statistics (ONS) announced yesterday that manufacturing output also dropped by 1.2 per cent in the same period.
Markit’s Chris Williamson stayed optimistic: “A surprise fall in industrial production in August is likely to have been a temporary blip in an otherwise strengthening manufacturing economy. The underlying trend in production growth is in fact still the strongest since mid-2010.”
However, Berenberg’s Robert Wood said that the poor results posed a downside risk to growth in the third quarter, which the bank still predicts will expand by 0.9 per cent: “Britain has not yet reached the nirvana of well balanced growth.”
Despite improvement in other indicators, manufacturing production in August was 0.2 per cent lower than the same month in 2012. Some sectors, like mining and quarrying (which includes oil and gas) continued to collapse, down by 10.1 per cent in 12 months.