British manufacturing in surprise official fall

11th June 2010, Comments 0 comments

British manufacturing output fell unexpectedly in April from the level in March when it had soared, official data showed on Friday.

Output in April dropped 0.4 percent from March but it grew by 3.4 percent on a 12-month basis, the Office for National Statistics (ONS) said in a statement.

Output in March had jumped 2.2 percent from the February level in the biggest rise for eight years.

Economists had expected manufacturing output, which accounts for about 13 percent of Britain's gross domestic product, to have increased in April by 0.4 percent on the month and by 2.8 percent annually, Dow Jones Newswires said.

The ONS said the month-on-month drop was driven by weaker production of transport equipment, food and drink, and electrical and optical equipment.

IHS Global Insight economist Howard Archer said the data did not signal an end to the manufacturing sector's recent strength.

"Rather, it needs to be seen as a correction after a particularly strong jump in output in March."

Archer said manufacturers still appeared to be "benefiting from healthier demand both at home and, particularly, overseas, improved competitiveness in both domestic and foreign markets stemming from the weak pound, and leaner stock levels.

"The key question is though can manufacturers sustain healthy growth over the medium term, particularly as fiscal policy is tightened substantially? Furthermore, UK manufacturers will be desperately hoping that the eurozone debt crisis does not derail growth in the region," he added.

The broader measure of industrial production, which includes mining and quarrying, and electricity, gas, and water supply, was also 0.4-percent weaker in April compared with March, but was 2.1-percent stronger on the year, the ONS said.

© 2010 AFP

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