Official UK manufacturing data exceeds expectations

The monthly index of production from the Office for National Statistics (ONS) for December climbed 0.9% compared with the previous month with the more robust three monthly figure covering October, November and December being 0.8% higher than the previous quarter. The figures also showed that UK manufacturing output in 2009 as a whole fell by 10.5% compared with 2008. Commenting on today's data, EEF chief economist Lee Hopley (pictured), said: "It is encouraging that manufacturing looks likely to have made a bigger contribution to growth in the economy than first thought. Whilst output is still some way below pre-recession levels, a strong performance at the end of last year across a broad range of sectors provides some hope that there may be some momentum behind a recovery and moves towards a more balanced economy." At Barclays, head of manufacturing, transport and logistics Graeme Allinson said that although the ONS figures appeared more subdued than those from the CIPS, "it was always going to be difficult to match the largest growth in reported orders for a decade". He went on: "Expectations should be set for more pronounced indications of growth to occur only in the second half of the year as political uncertainties continue to impact the manufacturing sector and new business investment increases at a very pedestrian rate as a result. However, export figures, particularly outside of the EU, are strengthening consistently, underlining the internationalisation of the UK's economic recovery."