BRITISH manufacturing output surged in August continuing a four-month upward trend and breaking a 16-year record, official data showed yesterday, easing fears the economy is on the verge of a sharp downturn.
The Office of National Statistics (ONS) said output increased 0.3 per cent in August taking the annual growth rate to six per cent, the strongest annual rate since the end of 1994.
Ten out of the 13 manufacturing sectors reported growth. Industrial production, which includes mining and utilities, rose 0.3 per cent in August, taking the annual growth rate to 4.2 per cent – a rate of increase also not seen since 1994.
The largest increases in output were in the machinery and equipment industries, where output rose by 16 per cent year-on-year and the food, drink and tobacco industries which saw a year-on-year increase in output of 7.7 per cent. The ONS data showed only electricity, gas and water output as declining slightly by 0.2 per cent.
But economists were cautious about the significance of the figures for interpreting the strength of the economy.
“These are good readings to be honest, but still it’s going to take a long time for output more generally in the UK to get back to its peak level,” said George Buckley, economist at Deutsche Bank.
Peter Dixon, economist at Commerzbank added: “The figures are slightly ahead of the consensus view now because they are somewhat backward looking.”
“How strong output activity will look in the future will depend on how well the global economy recovers. There’s a lot of concern it is losing momentum,” added Dixon.