Surprise dip in UK manufacturing
June 13, 2006
The UK's manufacturing sector has seen its worst fall in output for more than six months, official figures show.
A decline in production of paper and electrical goods contributed to April's manufacturing output slipping by 0.2%.
The surprise fall followed a 0.7% rise in March, when output was boosted by demand for electrical goods in the run up to the World Cup.
Output was up by 0.5% on April last year, although March's annual rate was revised upwards to 1.6%.
Recent surveys by business groups have suggested that the manufacturing sector is recovering, with the latest study from the EEF saying that output was at a 10-year high.
Rate moves
The Office of National Statistics (ONS) which compiles the figures, said April saw the weakest monthly output for manufacturing and industrial production since October 2005.
The broader measure of industrial production - which includes extractive industries such as mining, oil and gas, as well as power and water utilities - was down by 0.6%, against forecasts of a 0.3% rise.
But on a year-by-year basis, oil and gas extraction slipped 8.5% and mining output dropped significantly, down 9%.
The ONS figures came on the day the Bank of England was expected to hold interest rates at 4.5%, though many analysts expect an increase in rates in the coming months.
But David Page, an economist at Investec, said the latest manufacturing figures could lead to change in sentiment.
"They are much weaker than expected, which is contrary to survey evidence," he said
"It suggests growth in the second quarter for the economy as a whole could be softer than the market currently anticipates.
"It goes some way to undermining the current market view that the next move in rates is upwards."
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