OUTPUT from Britain’s industrial sector has edged higher for a third consecutive month, adding to hopes of a modest recovery in the wider economy.
Official data yesterday revealed that industrial output, which accounts for about 16 per cent of gross domestic product (GDP), rose 0.1 per cent month-on-month in April, beating expectations for a flat reading. It follows a jump of 0.7 per cent in March.
Measured on an annual basis, industrial output was down 0.6 per cent, less than half the drop recorded for March.
The figures mirror the findings of other surveys which suggest that the manufacturing sector has returned to growth.
Britain’s economy as a whole grew by a stronger-than-expected 0.3 per cent in the first three months of 2013. However, the recovery was driven mainly by higher services output.
Howard Archer, chief UK economist at IHS Global Insight, the forecasting consultancy, said that overall production levels were still on course to contribute to another increase in GDP for the second quarter,
He added: “Manufacturers will be hoping that the recent signs of improvement in the UK economy are sustained and that this increasingly lifts business and consumer confidence which in turn translates into higher demand for capital goods and consumer goods.”
A narrower measure of manufacturing output, which excludes energy production, shrank by 0.2 per cent month-on-month in April, compared with forecasts for a 0.3 per cent drop.
Lee Hopley, chief economist at manufacturers’ organisation EEF, said: “The modest contraction in [factory] output puts a brake on the recent positive run of data.”
But she added that despite the dip, the UK was still on course for a pick-up in manufacturing for the second half of the year.
In April, mining and quarrying output rose while electricity and gas supply fell and water supply and sewerage output was up.
The data was provided by the Office for National Statistics.