Manufacturing under renewed pressure as output falls further

THE manufacturing industry has come under renewed pressure after latest production figures showed output fell by 1.5% in January compared with the previous month.

The figures raise further concerns about the possible return to recession and place added pressure on Chancellor George Osborne to produce stimulus policies when he presents his latest Budget next week.

The fall was worse than expected and the situation has been made worse by separate data which showed UK’s trade deficit shrank in January.

The pound reacted badly to the announcement, falling back against both the dollar and the euro.

Data from the Office for National Statistics showed the goods trade deficit was £8.195bn in January, compared with £8.738bn in December. The goods trade deficit with non-EU countries also narrowed to £3.280bn from £4.169bn in December.

Both sets of figures are at their lowest since July. Total exports fell 3.5% to £24.4bn, a drop of £900m. Imports also fell, down £1.4bn to £32.6bn, a decline of 4%.

Richard Halstead, Midlands Region Director at EEF, said: “The first official statistics don’t bring any sign of improvement in the UK’s growth performance at the start of the year.

“Both manufacturing output and goods exports were down more than expected with production across most sectors struggling and, export sales weak in both European and non-EU markets. While there is a fair bit of volatility in both the production and the trade numbers, the main take away from the data so far this year is that much of manufacturing is facing an uphill challenge to grow in a difficult global demand environment.”