The latest UK manufacturing figures are ‘disappointing’, the British Chambers of Commerce (BCC) says.
Office for National Statistics (ONS) figures out today show weaker-than-expected manufacturing figures. Industrial production, which includes sectors such as mining and energy supply, grew 0.3 per cent month-on-month in March, while manufacturing output edged ahead 0.2 per cent, ONS said.
Economists were expecting growth of 0.8 per cent and 0.4 per cent respectively.
The lower-than-forecast month-on-month growth was driven by declines in the production of consumer durables, such as computers, white goods and phones, and capital goods, such as machinery.
BCC chief economist David Kern said the latest figures were “disappointing” and the “upturn in output must accelerate”.
“With the financial sector likely to remain weak, a sustained economic recovery largely depends on a rebalancing towards manufacturing.
“As the manufacturing sector will play a key role in driving exports and innovation, more needs to be done to make sure the pace of growth improves.
“While British businesses support the Government’s measures aimed at reducing the deficit, more effort must be made to enable private-sector firms, particularly small and medium-sized businesses, to invest, export and create jobs,” Kern said.
ONS’ figures came as the International Monetary Fund (IMF) warned the UK faces considerable uncertainty and “strong headwinds” from the fiscal squeeze.
Government cuts and higher household debt will hold back growth to around 1.7 per cent in 2011 and 2.3 per cent in 2012, the IMF said, in line with yesterday’s forecasts from the Bank of England.
Chancellor George Osborne has singled out the manufacturing sector for praise on more than one occasion, including yesterday in a speech made to the Institute of Directors. But recent surveys, including ONS’ figures, suggest the growth seen earlier this year is coming off the boil.
Howard Archer, chief UK and European economist, said: “There is significant concern that manufacturers will find life increasingly challenging over the coming months as stock rebuilding wanes and tighter fiscal policy weighs down on domestic demand.
“Furthermore, high oil prices and elevated input costs are a serious problem for UK manufacturers by substantially squeezing their margins and putting pressure on them to raise prices and risk losing business,” he said.