Jump in UK manufacturing output

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A strong performance from the pharmaceutical industry helped to lift output

UK manufacturing output grew at the fastest pace for nearly four years in April, according to official figures.

Manufacturing output grew by 2.3% in April, the Office for National Statistics (ONS) said, the biggest monthly rise since July 2012.

The wider measure of industrial output increased by 2.0%, also the biggest rise since July 2012.

The pharmaceutical industry helped to drive the increase, with output in the sector up 8.6%.

That was the biggest increase since February 2014.

“Anecdotal evidence suggested increased exports were the main contributing factor to the rise” in the pharmaceutical sector, the ONS said.

Industrial output in April was up 1.6% compared with a year earlier, while manufacturing output was 0.8% higher compared with April 2015.

‘Turning the corner’

Zach Witton, deputy chief economist at the EEF manufacturers’ organisation, said: “Whilst the size of the gain is surprising, it generally fits with the picture that the worst may now be behind the sector.

“It also backs up the feeling that there are no concrete signs that uncertainty associated with the upcoming referendum has had a major impact on manufacturing.

“While month-on-month data can be volatile, today’s data suggests that manufacturing is turning the corner, and looks set to return to growth in the second half of this year.”

Martin Beck, senior economic adviser to the EY Item Club, said the latest figures suggested the economy might not have slowed as much as feared in recent months.

“Alongside April’s strong increase in retail sales, and continued growth in car registrations pointing to a decent performance from the services sector, today’s industry numbers suggest that previous fears of a sharp slowdown in the economy in the second quarter may prove overly pessimistic.”

Volatile data

The official output figures contrast with recent surveys that had indicated weak growth in the manufacturing sector.

The Purchasing Managers’ Index survey from Markit/CIPS suggested manufacturing activity contracted in April, before recording slight growth in May.

Chris Williamson, chief economist at Markit, warned that the revival suggested by the official figures, could be short-lived.

“Even the ONS cautioned about reading too much into the buoyancy hinted at by the data,” he said.

“The monthly data are often volatile and April was no exception.

“The improvement in the official data also contrasts with deteriorating survey evidence on the health of the economy, and manufacturing in particular, in recent months, suggesting the April upturn may be reversed in May.”

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