Factory output down in third quarter


Manufacturing output fell by 0.9% in the third quarter of the year, the first three-month period after the EU referendum vote.


There were big falls of 7.5% in output in the drugs industry, a 2.5% fall in electrical equipment and a 2.2% cut in transport equipment. 


On the other hand, there was a welcome 4.8% increase in the output of textiles.


Manufacturing output was 0.5% higher than the same period a year ago, the Office for National Statistics (ONS) said.


The more volatile monthly figure showed output in September was up by 0.6% on the previous month.


Britain’s manufacturers are set to pare back their investment in plant and machinery over the next two years in response to increased uncertainty about the demand outlook, according to a major annual survey of manufacturers published by the EEF manufacturers’ organisation and Santander. 


In addition, a hefty spike in political uncertainty since the EU referendum, the highest in the history of the survey, has added another layer of complexity to manufacturers’ investment plans. This double whammy of demand and political uncertainty has inevitably introduced a note of caution to manufacturers’ investment decisions.


According to the ONS, output of the production industries — manufacturing, mining and utilities — was 0.5% down on the previous quarter, but 1.0% higher than a year ago.


The more volatile monthly figure showed industrial production in September was down by 0.4% on the previous month.


www.ons.gov.uk/economy/economicoutputandproductivity/output/bulletins/indexofproduction/sept2016


https://www.eef.org.uk/about-eef/media-news-and-insights/media-releases/2016/nov/investment-to-slow-as-post-brexit-uncertainty-and-demand-outlook-bites