New data from the ONS shows UK manufacturing has grown strongly over the past year

The latest data by the Office for National Statistics showed that UK industrial production saw no growth between July and August. However, output stood 2.5% higher than the same month a year ago, reflecting the strong rebound that the sector has seen as the economy has recovered. The improvement in the manufacturing sector over the past year is even greater – output here stands 3.9% higher than a year ago on the latest data.

However, although the UK’s production industries have rebounded strongly, they still have a lot of catching up to do. These sectors were hit hard by the financial crisis and it shows in the figures – while services sector output stands above Q1 2008 levels, production output is 9.6% lower and manufacturing output 4.4% lower.

Regaining this lost ground will prove challenging in the near future. The Eurozone – which accounts for over two fifths of UK goods exports – is struggling to avoid tipping back into economic contraction, and this is going to weigh on UK export prospects for the next year at least.

There are already signs that the manufacturing sector is slowing. The Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) fell to 51.6 in September from 52.2 in August. While the PMI remains above 50 (a figure greater than this points to growth) this is the lowest reading for 17 months.

Cebr’s latest economic forecasts show UK manufacturing sector growth slowing from 3.6% this year to 1.3% next year, reflecting global pressures.