Britain’s industrial output rose at its fastest pace in more than a year in May as factories ramped up production, bouncing back from the disruption the previous month caused by the Japanese earthquake and royal wedding.
The Office for National Statistics (ONS) said that manufacturing output, which does not include utilities or oil and gas extraction, rose by 1.8 per cent in May, after a downwardly revised drop of 1.6 per cent in April.
The figure was ahead of economists’ forecasts of a 1 per cent rise and the strongest showing since March 2010.
However, the wider measure of industrial output failed to fully recoup April’s losses. Underlying growth was weak, in a further sign that the economy has lost momentum, the data showed.
Industrial output rose by 0.9 per cent in May, below forecasts and making up only half of April’s drop, the ONS said. This was largely due to a sharp fall in oil and gas production due to unplanned maintenance work.
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Britain’s manufacturing sector has been one of the few bright spots in the economy, which otherwise appears to be struggling to gain momentum.
Surveys of services, manufacturing and construction this week suggest the economy grew just 0.3 percent in the second quarter after a disappointing reading of 0.5 per cent in the first three months of the year.
Vicky Redwood, an analyst at Capital Economics, said that industrial production was still on track to fall in the second quarter when compared to the first three months of the year, which was dragging down GDP.
“May’s rise in manufacturing output only just offset April’s bank holiday-related drop, adding to other evidence suggesting that the industrial recovery is weakening,” she said.
“It is possible that output is still feeling some knock-on effects from supply disruptions caused by the Japanese earthquake. But the survey evidence has given a pretty consistent picture of an underlying slowdown in demand for UK manufacturers’ products both at home and overseas. Accordingly, this slowdown in the industrial recovery looks like it might continue.”
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Victoria Cadman, at Investec, said: “On the face of it, if you look at industrial production it is slightly disappointing. Manufacturing, however, is better than expected.
“The numbers certainly provide some scope for optimism and push aside some of the worries we had about a softening in the manufacturing sector, especially after the PMI surveys.
“However, it still looks pretty likely that industrial production overall will be negative over the second quarter and a drag on Q2 GDP.”