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UK CommentUK industrial production disappointed in February

  1. Production lifted by energy and weighed down by manufacturing and mining
  2. Bad weather in Feb. did not affect manufacturing numbers, according to the ONS
  3. Underlying manufacturing momentum seems to have slowed in Q1
Production lifted by energy and weighed down by manufacturing and mining
UK industrial production increased by a meager 0.1 percent in February after increasing 1.3 percent in January. The February reading was weaker than the consensus expectation of 0.4 percent. Manufacturing also disappointed, falling by 0.2 percent in February after growing by 0.1 percent in January. The consensus expectation for February was +0.2 percent. The largest contribution to growth in industrial production came from energy supply, which increased by 3.7 percent, following a decrease of 2.6 percent in January 2018. According to the ONS, the below-average temperatures in February had a positive impact on energy. On the other hand, production within manufacturing and mining and quarrying fell in February. Manufacturing, which was down by 0.2 percent, registered its first fall since March 2017. Within manufacturing, seven of the 13 sub-sectors decreased on the month, led by machinery and equipment. The weather was unusually bad at the end of the month; however, despite snowfall in some areas of the UK in February, there was no evidence to suggest that the snowfall had any negative impact, according to the ONS.
Underlying manufacturing momentum seems to have slowed in Q1
Manufacturing output growth has clearly decelerated since the second half of last year, and sentiment surveys, such as PMI and the CBI and the EC surveys, indicate that output growth stayed weak throughout Q1. Some of the weakness in Q1 is weather-related, as the weather was bad in March as well. However, underlying momentum also seems to have slowed from Q4 last year.


 


 


Disclaimer

Kari Due-Andresen

Chief Economist Norway

Norway and UK

kadu01@handelsbanken.no

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