UK Manufacturing Output Level Best For A Decade
The UK manufacturing sector contributes 19% to UK GDP, so it remains a significant activity despite the loss of heavy industry seen since the 1970s. Before the decline in UK heavy industry, the sector accounted for a quarter of national GDP. Indeed, the UK manufacturing sector employs 2.7 million workers, produces 45% of UK exports accounts for 14% of UK business investment and 68% of the nations business R&D. The UK remains the 9th largest manufacturing nation in the world.
UK manufacturing output has enjoyed seven straight months of expansion and the latest rate of expansion, for November 2017, puts it at the fastest seen since 2008.
In November, manufacturing output rose by 0.4% according to ONS. The biggest contribution to the November rise was the energy sector which bounced back by 3.2% over the October figure for the sector as October was warmer than average in the UK whereas November was colder than usual.
As usual, the picture was mixed. Construction fell by 2% in the three months to November compared to the previous 3-month window, representing the sectors worst quarterly fall since the summer of 2012, although there was a 1.2% rise in new housing construction. On the other side of the balance, there was a 3.9% increase for the three months to November 2017 compared to a year earlier, thanks to exports of aircraft, boats, cars and renewable energy components.
UK exports have enjoyed a competitive boost since the depreciation in Sterling following the referendum decision in 2016. Economic activity as a whole in the UK economy managed to grow at 0.4% in Q3, but the rate of growth slowed across the year.
The chief economist of EEF, a manufacturers’ organisation, Lee Hopley noted: “UK manufacturers were, in the main, in good shape as 2017 came to a close, with the majority of sub-sectors enjoying growth. Manufacturers’ expectations for the year ahead point to output and export growth being maintained through this year on the back of continuing support from a burgeoning global economy. This, together with an ongoing commitment from government to deliver on its industrial strategy, will be crucial in helping to propel the sector forward.”.