Create a free account to continue

UK Industrial Output Drops 6 Percent

Industrial production fell by 6 percent in November compared to a year ago, though it rose 0.4 percent higher from in October, Office for National Statistics said.

LONDON (AP) -- U.K. industrial production fell by 6 percent in November compared to a year ago, though it was 0.4 percent higher than in October, official statisticians said Wednesday.

Many analysts believe that Britain's economy returned to a modest level of growth in the fourth quarter for the first time since the first quarter of 2008, though the latest report underlines the sluggish pace of recovery.

Manufacturing output -- a subset of industrial output, which also includes mining and utilities -- fell by 5.4 percent compared to November 2008, with 10 of 13 sub-sectors reporting declines, the Office for National Statistics said. Hardest hit was the machinery and equipment industries which reported a 17.4 percent fall.

The agency said manufacturing output was unchanged from the previous month.

Mining and quarrying was down 6.5 percent, with coal extraction down 16 percent and oil and gas extraction down 4.1 percent.

Electric supply output fell 17 percent and gas supply output decreased by 5.5 percent, the agency said.

"While latest data and survey evidence have been improved overall and the economy seems likely to have seen a clear return to growth in the fourth quarter, the further stagnation in manufacturing output in November is a telling reminder that the U.K. still faces a major challenge to develop significant, sustainable recovery," said Howard Archer, economist at IHS Global Insight.

Economist Jonathan Loynes at Capital Economics also expected the recession to have officially ended with a return to growth in the fourth quarter.

"While activity in the manufacturing sector has stabilized after the steep falls of the previous year or two, a return to strong and sustained rates of expansion remains some way off," Loynes said.

The National Institute for Economic and Social Research on Wednesday forecast that U.K. GDP increased by 0.3 percent in the fourth quarter.

If so, the respected think tank said, that would mean that the British economy contracted by 4.8 percent last year, the worst annual drop since 1921.

The NIESR estimates for the third quarter proved to be optimistic, as it first predicted growth, then no change. Official statistics later confirmed that GDP fell by 0.2 percent in the third quarter.

The Office for National Statistics will publish a preliminary estimate of fourth-quarter GDP on Jan. 26.

More in Operations