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UK Industrial Production Growth Fastest Thus Far This Year

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UK industrial production grew at the fastest pace thus far this year in September and exceeded economists' expectations to end the third quarter on a strong note.

Industrial production rose 0.7 percent from August, when it increased 0.3 percent, preliminary data from the Office for National Statistics showed Friday. Growth was more than double the 0.3 percent gain economists had forecast.

Production increased for a sixth successive month and the growth was the fastest since December, when it rose 1.1 percent.

Manufacturing output also rose 0.7 percent month-on-month, following a 0.4 percent increase in August. Economists had expected 0.3 percent growth.

Factory output growth was also the strongest since December, when it rose 2.4 percent.

Output growth was led by a strong outcome in the machinery and equipment group.

On a year-on-year basis, industrial production rose 2.5 percent in September following 1.8 percent increase in August. The growth was the fastest since February, when production increased 2.9 percent.

Manufacturing output increased 2.7 percent year-on-year, after a 2.8 percent gain in the previous month.

In the third quarter, both industrial production and manufacturing output grew 1.1 percent each from the previous three months, when they fell 0.3 percent each.

The third quarter production growth figure was revised up by 0.1 percent from the initial estimate released on October 25.

The ONS also released the UK foreign trade data for September, which showed that overall trade deficit narrowed more-than-expected.

The total trade deficit narrowed by GBP 0.7 billion between August and September to GBP 2.75 billion, mainly due to a GBP 1.3 billion increase in exports of goods.

However, the total trade deficit widened by GBP 3 billion to GBP 9.5 billion in the three months to September, mainly due to an increase in imports of goods, mainly machinery, non-monetary gold and fuels.

The visible trade deficit narrowed to GBP 11.25 billion in September from GBP 12.35 billion in the previous month. Economists had expected a shortfall of GBP 12.80 billion.

Separate data from the ONS showed that construction output decreased 1.6 percent month-on-month in September, amid declines in both repair and maintenance as well as all new work. Economists had forecast a 0.9 percent fall.

Year-on-year, construction output grew 1.1 percent, which was slower than economists' forecast for 1.7 percent gain.

Both the monthly decline and the annual increase were the weakest figures since March last year.

Consequently, the estimate for the third quarter sequential decline in construction output was revised down to 0.9 percent from 0.7 percent.

"The flurry of activity data suggests that the industrial sector is helping to provide some offset to the consumer slowdown," Capital Economics economist Ruth Gregory said.

"However, net trade probably dragged on GDP growth in Q3."

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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