UK industrial sector continues to struggle
Latest data indicates a third consecutive monthly decline
by Abi Moses on 17th May, 2017
Official data released by the Office for National Statistics (ONS) has indicated that the UK's industrial sector endured another difficult month in March with manufacturing production down for a third consecutive month.
Although analysts had predicted a month-on-month drop of 0.2%, few would've expected the slowdown to be as much as 0.6%. March's decline comes after a 0.1% slowdown was recorded in February.
Although year-on-year production was up 2.3%, that was still some way short of the 3% gain that had been expected.
Although Brexit is likely to have hit both basic metals and metal productions, energy supply fell 4.2% month-on-month due to warmer-than-expected temperatures.
Overall industrial production fell 0.5% and 0.8% in March and February respectively, compared to analysts' predicted decline of 0.4% and 0.7%.
Naeem Aslam, chief market analyst at Think Markets UK, said "The industrial production number released today is rotten and it clearly communicates how investors have scaled back from committing any major projects. Both the construction output and industrial production numbers deliver one simple key message for Theresa May, it is not the time to go out and talk about hard Brexit. In other words, the effect of Brexit have started to surface and today's economic number is a clear evidence of this."
The ONS' data was branded as "ropey" by IHS chief UK and European economist, Howard Archer, who continued, ""The poor data dilute any hopes that markedly slower GDP growth of 0.3% quarter-on-quarter in the first quarter could be revised up. Indeed, the actual industrial production data was weaker than estimated in the preliminary first quarter GDP estimate while the trade deficit unexpectedly widened."
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