- Chris Williamson, chief economist at Markit
UK manufacturing and industrial production both dropped unexpectedly in November, according to the Office for National Statistics. Industrial production declined 0.7% in the reported month from October, dragged down by a fall in manufacturing and a drop in North Sea gas extraction, marking the biggest monthly decline since early 2013. At the same time, manufacturing output slid 0.4% against economists' expectations for a 0.1% increase. Measured on an annual basis, manufacturing production shrank 1.2%, marking its fifth straight month of contraction. Economists, however, had predicted a 0.8% slide. Nevertheless, manufacturing production continued to grow on a quarterly basis, climbing 0.5% in the three months to November, the biggest increase since October 2014, and compared with the 0.3% growth in the quarter to October. Still, factory production remained 6.1% below the pre-crisis level peak seen in the first quarter of 2008.
The decrease signalled that the British economy slowed toward the end of 2015 and remains largely reliant on consumer spending and the services sector for growth. The recent data suggest that the UK manufacturing industry will make only a marginal positive contribution to broader economic growth in the fourth quarter of 2015.
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