Industry output dive means GDP could go down

Ben Southwood
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OUTPUT IN the production industries dived in September, data showed yesterday, driven by a collapse in mining and quarrying, which analysts suggested might lead to downward GDP revisions.

Manufacturing output rose 0.1 per cent into October, according to the Office for National Statistics, but overall production was dragged down 1.7 per cent by a 15.3 per cent plunge in resource extraction output.

This meant production was a full 2.6 per cent lower than a year earlier, while the small September improvement could not erase an overall one per cent decline in the sector over the year.

Analysts said this fall could bring a 0.1 percentage point revision in third quarter GDP growth. “There is a distinct possibility that the third quarter GDP figures, which initially showed one per cent growth, would be revised down slightly to show a rise of only 0.9 per cent,” said David Kern at the British Chambers of Commerce.

But forecasts from the National Institute of Economic and Social Research out yesterday held that overall, the economy may continue recovering in October, with GDP rising 0.5 per cent over the month.