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UK CommentUK manufacturing production falls the most since Oct 2012

  1. Industrial production down 0.8% and manufacturing down 1.4% in April
  2. Widespread weakness throughout the manufacturing sector
  3. Sentiment suggests some short-term improvement but indicates weak longer-term trend
IP down 0.8% and manufacturing down 1.4% in April
UK industrial production (IP) fell by 0.8 percent in April, after increasing by 0.1 percent in March. The reading was much weaker than the consensus expectation for an increase of 0.1 percent. The largest downward contribution came from manufacturing, which fell by 1.4 percent in April, after falling 0.1 percent in March. The manufacturing turnout was also much weaker than the consensus expectation of +0.3 percent. The monthly declines in IP and manufacturing are the largest since December 2017 and October 2012 respectively. Within manufacturing, 9 of the 13 sub-sectors saw output falling. According to the ONS, the fall in manufacturing is supported by widespread weakness throughout the sector, due to a reduction in the growth rate of both export and domestic turnover.
Sentiment suggests some short-term improvement but indicates weak longer-term trend
Manufacturing sentiment, as measured by the PMI survey, improved a little in May, after having fallen further from March to April. However, the trend in the headline manufacturing PMI is still firmly downward, weighed down by new orders and employment. On the other hand, the manufacturing PMI output index has showed some improvement since February. The y-o-y growth rate in manufacturing output fell to 1.4 percent in April, from 2.9 percent in March. All in all, manufacturing sentiment suggests there might be room for some short-term improvement, but the longer-term trend seems weak.

 


Source: Macrobond


Source: Macrobond


Source: Macrobond Disclaimer

Kari Due-Andresen

Chief Economist Norway

Norway and UK

kadu01@handelsbanken.no

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