‘Some better news’ under latest manufacturing figures

The bald data from the Office for National Statistics showed output from the UK’s manufacturing industries falling 0.9% between January and February – its lowest rate of decline for six months – while the generally more reliable three monthly figure up to February was 6.5% lower than for the previous three months and 12.2% lower than for the same period a year ago. Tom Lawton (pictured), head of manufacturing at business advisors BDO Stoy Hayward, said the fact that output had decreased for 12 successive months demonstrated that life in the manufacturing sector had been nothing but a struggle over the past year. He went on: “Much of this decline is being led by the fall in production of motor vehicles, which was down 30.7% for the three month period, and an appalling 44.9 per cent for the same three months last year. However, with output decreasing at its lowest rate of decline in six months, this could suggest that the sector is beginning to show some signs of recovery.” At the manufacturers’ organisation EEF, chief economist, Steve Radley said that while the further contraction in manufacturing signalled another difficult quarter, the figures also masked some better news. “The fact that one of the worst hit sectors, basic metals, posted positive growth suggests that the fall in manufacturing activity might just be starting to level off,” he said. The British Chambers of Commerce (BCC) own quarterly economic survey today showed what it described as “sharp declines in manufacturing exports”, which it said reached 10 year lows, showing that heavy falls in the value of sterling had been offset by the global downturn and low levels of demand. It subsequently warned that the slightly better official data should not be allowed to mask the sector’s problems. BCC chief economist David Kern said: “Although manufacturing did not fall as sharply as feared, this should not obscure the seriousness of the problems facing the sector. Over the past year, we have witnessed a severe decline in output, made worse by the collapse in world trade. The sector’s skills base is facing real threats. UK manufacturing is already too small and avoiding further irreversible losses must be a national priority.”