Summer bounce for manufacturing
9 Sep 2014
Manufacturing and in particular process industries like pharmaceuticals returned to growth this summer after a slump in production at the end of spring.
According to the Office of National Statistics’ (ONS) monthly Index of Production (IoP), an index where 2010 output levels are set as the baseline level of 100, manufacturing in July was at 102.2, up from 101.5 in May and 101.9 in June, and up 2.2% from July 2013’s score of 100.6.
July’s rise followed a fall of 1.3% between April and May this year, when the IoP cited pharmaceuticals as one of the sectors that suffered the most.
However, according to the latest IoP published today, pharmaceuticals was one of the strongest performing sectors this summer with production levels up 0.2 percentage points between June and July, although only up 0.02 percentage points on July 2013.
Weakness in overseas markets remains a drag
EEF chief economist Lee Hopley
The other strong performer was the food and drink sector (also including tobacco), which was up 0.2 percentage points between June and July, and 0.3 percentage points year-on-year.
Rubber and plastics continues to be the strongest performing process sector on a yearly basis, with its production levels for July up 0.58 percentage points on July 2013.
“The first manufacturing data for the second half of 2014 confirms the picture of a slowing pace of expansion in the sector, with output increasing 0.3% in July,” said Lee Hopley, chief economist at manufacturers organization EEF.
“Nonetheless, manufacturing remains on track for growth of over 3% this year, with sectors such as rubber and plastics, non-metallic minerals and mechanical equipment continuing to post strong output gains. However, weakness in overseas markets remains a drag. Despite increasing over the month, goods exports fell 0.3% in the three months to July, amid an increasingly uncertain overseas environment.”
Today’s publication of the July’s IoP figures was accompanied by the Manufacturing Advisory Service’s (MAS) latest survey of the mood among small manufacturers.
Over two thirds (67%) of companies questioned in the MAS Barometer felt that increasing sales at home offered them the best chance to expand.
This was followed by new product development, improving production processes and over a third of firms (36%) who are focused on boosting export performance.
