Manufacturing output up but recovery ‘losing momentum’

The ONS figures show manufacturing output rose by just 0.1% in July. The small rise follows a fall in quarterly manufacturing output of 0.5% in Q2 compared to Q1. The year-on-year comparison was more positive, with manufacturing output up by 1.9% in July 2011 compared to July 2010. The monthly rise in manufacturing output was the 18th consecutive increase, albeit small, and Chris Williamson, chief economist at Markit, warned the data showed the manufacturing recovery has "lost considerable momentum" since earlier this year. "Despite the uplift in the underlying trend, the sector clearly remains in the doldrums and today's data will add weight to the calls for further quantitative easing among the doves on the Bank of England's Monetary Policy Committee," Williamson added. Manufacture of electrical & optical equipment was the main upwards driver in the July figures, increasing by 1%. In contrast, textiles fell by 3.5% from June to July.