-Howard Archer, an economist at IHS Global Insight
Both manufacturing and industrial output unexpectedly dropped in January, adding to concerns of the UK economy's deceleration. According to the Office for National Statistics, manufacturing production declined 0.5% between December and January, following the 0.1% increase. This was due to a 9.5% fall in electronics, the biggest in 13 years. Over the three months to January, a less volatile gauge of output, manufacturing rose 0.4% compared with the preceding three months. Total industrial production, which makes up about 15% of the UK economic output, slid 0.1% in the reported month, whereas economists had expected a 0.2% gain. Measured on an annual basis, industrial output advanced 1.3%. Weaker extraction of oil and gas has been one of the biggest drags in the last four months due to lengthy maintenance works of some of the largest oil rigs. In January, however, mining and quarrying was among the largest upward drivers, rising 2%. In yearly terms, industrial production increased 1.9%.
The ONS also said that despite the total GDP being well above the pre-crisis levels, both manufacturing and total industrial production remained 4.8% and 10.4% below those levels, respectively, in January.
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