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Ups and downs in UK industrial production - May 10, 2012 Manufacturing output rebounded strongly in March, after a steep fall in February, but a drop in output of the energy sector meant the wider measure of industrial production fell during the month. This is according to new research data produced by financial information services company Markit.   Chief economist Chris Williamson said: The data provides some reassurance that the UK manufacturing sector is not on its knees, but on the other hand it is clearly struggling to grow in the face of weak demand at home, recession in continental Europe and weaker growth in export markets further afield.   "Manufacturing output rose 0.9% in March following a 1.1% decline in February. However, the increase merely means the sector saw no overall change in production during the first quarter, highlighting the underlying weak growth trend in the goods-producing sector.   "Furthermore, a drop in energy production meant industrial output as a whole fell 0.3% in March, reversing a 0.4% rise in February. The increase meant the industrial sector grew just 0.4% during the first quarter, in line with the estimates used for the first release of gross domestic product and therefore not changing the picture of an economy that has slid back into recession, according to official data.   "The March rebound also looks set to be short-lived, with survey data suggesting that manufacturers saw a torrid start to the second quarter. The April PMI survey showed the first fall in manufacturers' inflow of orders since November, with exports collapsing at the sharpest rate for three years. The downturn in demand is causing increasing numbers of firms to scale back their production, and unfortunately to more or less put a halt on hiring. The survey suggests that the official data on manufacturing production will show a fall in April, raising the spectre of a further decline in GDP in the third quarter, although it is of course too early to put much weight on data from a sector that only accounts for around 10% of the economy.   "Manufacturers are struggling in the face of the steep downturn now evident in their main export market, the eurozone, and a slowdown in China. The US has been something of a bright spot for exporters, but even there signs have appeared to growth weakening. At the same time, demand at home clearly remains very subdued amid ongoing low levels of business and consumer confidence. There appear to be very few sources of new sales growth for UK producers at the moment.   "The recent appreciation of sterling is adding to their plight, making exports more expensive and making imports cheaper alternatives to UK-produced goods."   « Go Back © Business-Money.com Ltd

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