Daily Management Review

Annual Growth For U.K. Factories Highest Since 2014 Even As Exports Register Significant Growth


02/09/2018




Annual Growth For U.K. Factories Highest Since 2014 Even As Exports Register Significant Growth
The factory production in the U.K. touched its highest point since 2014 as figures for the same for the month of December was released recently.
 
There was a rise of 0.3 per cent rise in the month of December in manufacturing compared to the figure in November, shows data released on Friday by the Office for National Statistics. However, following the closure of one of the key pipelines of North Sea crude which caused a significant drop in oil output resulted in a decrease in the overall industrial output by 1.3 per cent which is more than what had been forecast by the market.
 
The trade deficit increased further in December to touch 4.9 billion pounds ($6.7 billion) and there was a1.6 per cent growth in the construction output, showed separate figures.
 
There has been a boost for exports due to the past deprecation of sterling and a strong demand in the global market and this has resulted in a steady growth of output for manufacturers for eight consecutive months which is the longest streak of such growth in three decades.
 
Increased output for ships, aircraft and cars had riven the manufacturing output in December according to official data. There has been a rise of 2.8 per cent in the factory output in 2017.
 
The discovery of a hairline crack in the Forties Pipeline System which resulted in its closure for almost three weeks was reflected in the drop in the total industrial production in December.  Additionally, the biggest drop in oil and gas extraction since 2012 was noted with a drop of 24 peer cent.
 
However, data for the final three months ending December 31, 2017 showed a slight increase in the overall economy of the country with a growth of 0.5 per cent according to the ONS, which also confirmed that the latest batch of figures apparently has had very little impact on the overall economic growth of the country.
 
There was an estimation of growth of 0.6 per cent in industrial production for the last quarter in the month of December but the sector noted a rise of.5 percent in the fourth quarter. O the oteh other hand growth in the construction sector fell by only 0.7 per cent while the market had predicted a fall of 1 per cent.
 
Growth in the fourth quarter was hampered by fall in trade. There was a widening of the gap between goods and services which touched 10.8 billion pounds while in the month of November it was 7 billion pounds.
 
However, there was an 11 per cent growth in exports for the entire of 2017 as the first contribution to economic growth was made by net trade in six years. The growth resulted in the deficit being closed down at 33.7 billion pounds with a narrowing in 7 billion value. 
 
According to Bank of England Governor Mark Carney, this trend should continue to persist in the coming years. Carney further added that exporters were in a “sweet spot.
 
(Source:www.bloomberg.com)






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