INDUSTRIAL production rose marginally during April, up by 0.1 per cent on the figure for March, marking the first three months of growth for over two years.
A rise was recorded by the Office for National Statistics (ONS) over February, March and April, the first full quarter of consecutive growth since January, February and March 2011.
Production was still down 0.6 per cent against April last year, after considerable falls in the final month of 2012.
The ONS registered a small decline in manufacturing production, with a 0.2 per cent contraction, though a bigger drop had been forecast.
Manufacturing has grown by a total of 3.8 per cent since 2009, while production in general remains depressed, having shrunk 1.4 per cent since the same point.
The most positive industrial sectors through the last twelve months have been pharmaceutical products, transport equipment and mental products.
Industrial output makes up 16 per cent of the UK’s GDP, meaning that most of the welcome growth in 2013’s first quarter can be attributed to expansion in the much larger services sector.
Nida Ali, economic adviser to the Ernst & Young Item Club, drew attention to economic turmoil in the rest of the EU as a problem for manufacturers. “Progress in manufacturing is likely to be slow. The Eurozone is still our biggest export market and weak demand will continue to restrain exports”.
Industrial production is growing at the fastest rate for almost three years, helping to drive an increased rate of economic growth. Further stimulus from the Bank of England therefore looks increasingly unlikely, with new governor Mark Carney taking the helm of an economy that is on a rising tide.
The UK economy can and will get better. Yesterday’s consensus beating industrial production data suggest the sector will contribute positively to growth in the second quarter. But that contribution will probably fade again in the coming quarters before getting decisively better next year.
Even if overall production simply holds steady in May and June, output will be about one per cent higher in quarter two than in the previous quarter, improving on the first quarter’s feeble 0.2 per cent quarterly rise. So April’s figures bolster hopes that GDP growth in the second quarter will be quite strong.