Markit chief economist Chris Williamson comments on UK industrial production data
Chris said: “Britain’s factories are booming, enjoying their best spell of growth for four years, according to the latest official data. The data not only indicate that the recovery has strong momentum, but also that the economy is rebalancing, though there is still a long way to go before manufacturing even regains its pre-recession size.
“Data from the Office for National Statistics showed UK industrial production rising 0.4% in April, with manufacturing output up 0.4%. The data were in line with expectations, according to a poll by Reuters.
“Compared to a year ago, manufacturing output has risen 4.4%, which is the best growth seen since February 2011. However, in the latest three months alone, output is up 2.0%, which is the largest increase since June 2010.
“While this growth needs to be seen in the context of manufacturing output still running some 7.0% below its pre-recession peak, the pace of expansion seen in recent months paints a very encouraging picture of how the recovery is gaining further ground. The data support survey evidence which suggests that the economy will have grown strongly again in the second quarter, perhaps by as much as 0.8%, which would take the level of GDP higher than its pre-recession peak.
“While the official data are only available up to April, the Markit/CIPS PMI manufacturing survey, alongside its sister surveys of construction and the services economy, has indicated a continuation of the country’s economic growth surge in May. In recent months the three PMI™ surveys have collectively signalled the strongest spell of private sector business activity growth seen in the 16-years of data collection. This growth spurt has been accompanied by record job creation as firms boost capacity to cope with the rise in demand.
“The official and survey data also help to dispel the notion that the recovery is based purely on consumer credit and the housing market, but is instead being fueled to a large extent by booming factories and industry. This so-called ‘rebalancing’ means the recovery is looking increasingly sustainable.”
