British Manufacturing Output Rebounds in May

A 1.2% uptick marked the biggest monthly gain since May 2011 and confounded market expectations for a drop of 0.2%, according to analysts polled by Dow Jones Newswires.

Manufacturing output in recession-hit Britain rose unexpectedly strongly by 1.2% in May from the April level, official data showed on Tuesday.

That was the biggest monthly gain since May 2011 and confounded market expectations for a drop of 0.2%, according to analysts polled by Dow Jones Newswires.

However, manufacturing output, which excludes mining and quarrying, as well as the electricity, gas and water supply sectors, sank 1.7% in May compared with a year earlier, the Office for National Statistics (ONS) added.

The wider measure of industrial output increased 1% in May from April, which was the biggest increase since March 2010. But industrial output was down 1.6% year-on-year, the ONS said in a statement.

Impact of Bank Holiday

Economists warned that moving a British bank holiday from May to June, to mark Queen Elizabeth II's Diamond Jubilee, might have flattered the figures.

"Industrial output increased significantly in May, driven by manufacturing and energy production," said Barclays Capital analyst Blerina Uruci.

"This good news should be interpreted with caution, however, as the extra working day during May would have boosted production."

Britain's recession is meanwhile deeper than initially thought, after recent data showed the economy shrank 0.3% in the first quarter after a higher-than-expected 0.4% contraction in late 2011. A recession is defined as two quarters running of contraction.

Copyright Agence France-Presse, 2012   

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