Member Article

UK manufacturing and production rockets in July

The Office for National Statistics has reported a significant 2.9% rise in production between June and July, and manufacturers enjoyed greatly improved output by 3.2%

After June produced disappointing results after the Queen’s Diamond Jubilee impacted output, July has shown a significant recovery according to ONS.

The national data compiler warned that caution should be used when looking at these results, as quick recovery has come about after a dip from the extra bank holiday.

The mining and quarrying sector also rose with a 4.9% increase, and water and waste management fared well with 1.6% improvements.

Positive figures were slightly offset by a dip in the electricity, gas, steam and air conditioning industry which suffered a slight decrease of 0.2%.

Although there has been a significant rise in output between June and July, figures show a 0.8% index of production decrease year-on-year, and economists warn that the UK still faces challenges.

David Kern, chief economist at British Chambers of Commerce commented: “The annual rise in output prices though still modest has accelerated.

“In the case of input price inflation the recent upturn is more pronounced and unless reversed will eventually have adverse effects.

“The producer prices figures published today confirm our assessment that the much needed fall in inflation is likely to face setbacks. This is largely due to recent rises in oil and food prices seen in recent months.

“While we expect consumer price inflation to continue falling over the next few years, the decline will not be as rapid and as smooth as first seemed likely.

“These concerns over inflation reinforce our view that the MPC should not use additional QE to limit falls in inflation below the 2% target.

“The economic situation remains difficult and these latest figures reinforce the need for the government to give greater priority to policies that will create growth.”

This was posted in Bdaily's Members' News section by Miranda Dobson .