More stable international economics bolsters UK manufacturing
1 min read
Europe's economic troubles seem not to have got in the way of the UK's manufacturing recovery as, in the view of one influential commentator, "increasing economic stabilisation" in international markets "has bolstered manufacturing output". Official manufacturing output figures from the Office for National Statistics (ONS) today (11 May) showed total manufacturing output increasing by 3.3 per cent in March 2010 compared to the same month a year ago.
Output increased in nine of the industry's 13 sub-sectors and fell in four sub-sectors. The largest contributors to the increase were the transport equipment industries which increased by 16.9 per cent and the basic metals and metal products industries which increased by 4.6 per cent. The largest decreases in output over the same period were in the paper, printing and publishing industries which fell by 2.0 per cent and the chemicals and man-made fibres industries which fell by 2.3 per cent.
Commenting on the data, Barclays' head of manufacturing Graeme Allinson (pictured) said: "The manufacturing bounce back continues as the sector made up significant ground in March compared with where it stood 12 months ago. The UK's recent growth mirrors that of other international markets where increasing economic stabilisation has bolstered manufacturing output."
Between February and March, manufacturing output increased by 2.3 per cent with output increasing in all but one of the sub-sectors. The largest positive contributions to overall output were increases of 3.9 per cent in the basic metal and metal products industries, 2.7 per cent in the paper, printing and publishing industries and 4.2 per cent in the machinery and equipment industries. The only negative contribution to overall output was a decrease of 0.5 per cent in textiles, leather and clothing industries.
Allinson added that Barclays had noted that along with a pick-up in applications for mergers and acquisition funding, there was increased sector interest in public to private deals. "This in part reflects the fact that UK markets are not adequately recognising how well the manufacturing sector has dealt with the current crisis, and therefore, we believe, leaving it somewhat undervalued," he said. With an undervalued sector, Allinson believes international buyers may also smell a bargain and UK manufacturers could become cross border acquisition targets, as interest in UK plc increases and the low value of Sterling continues to make such ventures an attractive prospect.
