Recent figures released by the Office for National Statistics have confirmed that industrial production in the country has declined by 0.7% from October despite popular expectations for no change. The decrease in manufacturing and industrial production in November did not only missed economists’ expectations but also turned out to be the biggest monthly decline since early 2013.
On the other hand, manufacturing output dropped by 0.4% versus expectations for a 0.1% increase. Whereas, manufacturing production fell 1.2% from November 2014, which was worse than the 0.8% slide forecasted by economists. In addition to that, the industrial production increased by 0.9% on the year even though the expected industrial production increment was 1.7%. The chief economist at Markit, Chris Williamson, stated that “clearly, the industrial sector looks to have once again made no contribution to economic growth in the closing quarter of 2015, leaving the economy reliant on the services sector to sustain the upturn,” adding that “weakness in part reflects the struggling energy sector as the industry adjusts to lower oil prices and saw demand slump amid unseasonably warm weather.”
Williamson also pointed out that “however, manufacturers are also having a torrid time. Producers are having to deal with a toxic combination of a historically strong exchange rate, weak global demand, intensifying competition, notably from the US and continental Europe, as well as growing uncertainty about the outlook at home and abroad. None of these factors are like to disappear any time soon, leaving industry facing further hard times in 2016 and the economy worryingly unbalanced.”
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