Industrial output stalls in September

The UK’s total industrial output stalled in September after an 0.3 per cent gain in August, official data shows, adding fuel to fears that the economy is approaching a second recession.

The overall industrial output measure reported by the Office of National Statistics, which includes oil and gas production and utility output, stayed at zero, disappointing expectations for an 0.1 per cent gain.

Manufacturers fared better, with their output edging up by 0.2 per cent in September, beating forecasts for an 0.1 per cent gain and after a fall in August.

"Domestic demand for manufactured goods is being held back by tight fiscal policy and the major squeeze on consumers’ purchasing power. Meanwhile, a marked slowdown in global economic activity is clearly hitting manufacturers’ export orders hard while the Eurozone crisis is causing major uncertainty and weighing down on confidence," said Howard Archer, chief UK and Ireland economist at IHS Global Insight.

The wider industrial measure showed falls in energy production and utilities output, and the ONS said that over the three months to September the output was 0.4 per cent, below its overall estimate for UK GDP growth in the quarter, of 0.5 per cent.

Within the manufacturing sector, six sub-sectors recorded a rise in output in September, and five fell. The main risers were transport equipment, basic metals and metal products and machinery and equipment.

The biggest falls were recorded in the food, drink and tobacco, computer, electronic and optical equipment and chemical and chemical products sectors.

The figures come after a survey last week showed manufacturing activity fell at its sharpest pace since Britain was in recession two years ago, and will do little to diminish fears it is heading for another downturn.