UK factory output fell by 0.5 per cent in July compared with June, according to figures released the Office for National Statistics this morning, as firms continue to battle against a strong pound weak economic growth in major export markets.
Total industrial production, which includes mining and quarrying as well as manufacturing, dropped 0.4 per cent.
“July’s industrial production and trade figures highlight that the strength of the pound and weakness in demand in key export markets held back the recovery in the manufacturing sector,” said economist Paul Hollingsworth from Capital Economics.
British exporters have struggled as their biggest market, the Eurozone, has struggled to sustain growth since the financial crisis. However, the Eurozone economy has looked in better shape this year.
The value of UK exports dropped 5.2 per cent in July compared with March. Imports rose 0.6 per cent.
“We would caution reading too much into the monthly trade figures as they are erratic – note that there was an especially large fall in chemical exports in July – and prone to significant revision. Nonetheless, this tentatively suggests that net trade will fail to make a significant contribution to GDP in the third quarter,” Hollingsworth said.