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British Manufacturing Sector Improves

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The British National Statistics Office has just published insight into the strength of the country’s manufacturing sector during the month of April. The headline Manufacturing Production figure for the month is now showing year on year growth of 4.4%, this compares favourably with the March reading of 3.3% and also easily outperforms the 4.0% figure anticipated by market consensus. Month on month this reading is slightly off at 0.4% expansion, this was all that was expected but it has to be noted that it does represent a moderate drop on the previous month’s 0.5% reading.

The wider Industrial Production numbers, which broaden to encompass activities such as mining, are also showing improvement on the month. The key year on year Industrial Production figure is at 3.0% for the month of April compared to 2.5% in March, this beats the 2.8% anticipated by the market. Month on month there is also a clear gain evident here, at 0.4% the Industrial Production number is easily up on April’s 0.1% and exactly where the market anticipated it to be at 0.4%.

These positive growth reading’s today are very import for the long term stability of the British recovery story. There had been concerns around the ‘engines’ of growth in the UK. According to the International Monetary Fund (IMF) and others, Britain had been relying too heavily on a consumer led recovery at the expense of neglecting both investment and production. This weekend saw an apology from the IMF chief, Christine Lagarde, who noted that the agency had got it wrong with it’s projections for the UK by not foreseeing the pick up in investment that occurred over the past few quarters.

With the added strength exhibited by today’s manufacturing sector figures it is becoming more evident that the UK now has all 3 ‘engines’ of recovery in operation and this bodes well not just for growth but also for the longer term sustainability of that growth.

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