British Industrial Output Slides Surprising Market

Dec. 7, 2012
Production fell by 0.8% in October from September, while market expected 0.8% increase.

Britain's industrial output sank unexpectedly in October when production of alcohol fell and maintenance work shut down parts of the oil and gas industry, stoking concern of a triple dip recession, analysts said.

Industrial production fell by 0.8% in October from September, the Office for National Statistics (ONS) said.

That confounded market expectations for a monthly increase of 0.8%, according to analysts polled by Dow Jones Newswires.

On a 12-month comparison, industrial output fell 3% in October, which was far worse than expectations for a 0.6% decline.

The biggest downward monthly contribution came from the manufacture of coke and refined petroleum, which slumped by 19.6% due to planned maintenance and lower production reported at a number of sites.

Output of food products, beverages and tobacco, sank by 2.4%. The ONS added that this was largely due to weaker output from alcohol manufacturing industries.

"The further drop in UK industrial production in October raises the chances of a triple-dip recession in the wider economy," said Capital Economics analyst Samuel Tombs.

"The recent weakness of surveys suggests that a recovery in manufacturing output is unlikely. As a result, it seems that industry will be one of the key sectors prompting a renewed fall in GDP in the fourth quarter."

Recent official data showed Britain had escaped from its double-dip recession in the third quarter of 2012, with gross domestic product (GDP) growing 1%.

However this was due to one-off factors such as the London Olympics and rebounding activity after public holidays in the second quarter of the year.

The ONS added Friday that manufacturing output, which excludes mining and quarrying, as well as the electricity, gas and water supply sectors, sank by 1.3% in October from September, and fell 2.1% on an annual basis.

Britain's economic outlook darkened this week after the government forecast that the economy was heading for shrinkage of 0.1% in 2012 and would grow by less than expected in coming years

The revised official forecast, announced in Wednesday's budget statement, compared with a prior growth estimate of 0.8%.

Copyright Agence France-Presse, 2012

About the Author

Agence France-Presse

Copyright Agence France-Presse, 2002-2024. AFP text, photos, graphics and logos shall not be reproduced, published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP shall not be held liable for any delays, inaccuracies, errors or omissions in any AFP content, or for any actions taken in consequence.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!