UK industrial output rebounded strongly in July, growing at its fastest pace for 25 years, official figures showed today.
Compared to the previous month industrial output rose by 2.9%, the most since February 1987, the Office for National Statistics (ONS) said. This followed the 2.4% decline seen in June, when output was hit by the extra public holiday and the late May public holiday being moved into June for the Diamond Jubilee weekend.
Manufacturing output grew by 3.2% in July, the biggest rise since July 2002, after a 2.9% fall the previous month. The ONS reported that, out of 13 categories in manufacturing, 11 rose and two declined in July compared to the previous month. The largest contributions to the UK’s monthly growth in manufacturing output came from the manufacture of basic metals & metal products, which rose by 6.2%, and the manufacture of transport equipment, which went up by 6.3%.
These latest figures indicate that the economy is starting to recover from the recession, although experts have cautioned that there is still a long way to go.
Howard Archer, an economist at IHS Global Insight, quoted by Bloomberg, said that UK manufacturers are still facing “a very challenging domestic and international environment”.
And David Kern, chief economist at the British Chambers of Commerce (BCC), highlighted the fact that longer-term trends in manufacturing show that output is still falling year-on-year, adding that there is the prospect of a decline in 2012 as a whole.
The ONS figures for July 2012 compared with July 2011 show that manufacturing output fell by 0.5% on an annual basis, while the wider measure of industrial output, which includes energy production and mining, was down 0.8% from a year earlier.
In a separate report released by the ONS today, the statistics agency said that factory output prices rose by 0.5% from July to August and were up 2.2% year-on-year. Higher oil prices meant that manufacturers’ raw material costs increased by 2.0% between July and August, taking annual input price inflation to 1.4%.