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UK Manufacturing Sector Strengthens

James Boston
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www.finances.com
UK Manufacturing Sector Strengthens

As Bank of England Governor, Mark Carney, gets set to address the annual Conference of the Trades Union Congress on the topic of wages, the British National Statistics office has published updated industrial production data. The overall Industrial Production reading for the month of July is now showing an increase of 1.7% on a year on year basis, this represents an increase in the pace of output over the June reading which was just 1.2%, the consensus estimate was for a 1.3% report. Month on month the expansion in the sector was measured at 0.5%, this pick up from the June rate of 1.3% also beat the consensus prediction of 0.2%.

When focussing in on just the manufacturing component of the sector, ie removing factors such as mining, the growth rate largely holds up. The year on year Manufacturing Production figure now stands at 2.2% expansion for June, this number was broadly anticipated by the market and represents and acceleration of the growth rate from the prior months 1.9%. On a month on month basis there was no change in the number, the 0.3% expansion experienced in June carried through to be repeated in July, this was largely anticipated by market analysts.

Despite the growth no evident in Britain’s industrial sector, the Balance of Trade situation is continuing to deteriorate. July’s Total Trade Balance shows that the deficit has widened significantly and now stands at -£10.2Bn compared to just -£2.459Bn in June, this created some market surprise as a narrowing to -£2.1Bn was predicted. The Goods portion of the Trade Deficit widened to -£10.168Bn for the month, compared to the -£9.431 experienced in June, the anticipated report here was for a number closer to -£9.1Bn. Finally, the Total Non EU Trade Balance deficit expanded to -£4.345Bn from -£3.841Bn in June, markets had expected this to be in the region of -£3.6Bn.

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