The slowdown in overall production growth this month can be largely attributed to mining and quarrying output falling back into year-on-year decline, and a cooling of expansion in manufacturing output.
This leaves the size of the manufacturing sector 7.4 per cent smaller in real terms than the Q1 2008 pre financial crisis peak. The IMF estimates that UK GDP could grow faster this year than any other G7 country, underlining the strength of recovery in the overall UK economy. However, figures highlighted today by the ONS illustrate how manufacturing remains a weak spot for the UK.
Looking ahead, this slower trend may well continue as figures from the latest ICAEW/Grant Thornton Business Confidence Monitor show that UK manufacturers have less expectations for sales growth over the next 12 months.
Is this another signal that growth in the UK economy is reaching a turning point towards cooling, following the strong rebound seen in recent quarters?
This emerging pattern has already been pointed to by both consumer and business confidence survey measures, which have plateaued or started declining in recent months. However, although a slowdown seems likely in the coming months, this should be seen as more of a moderation than a downturn.
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