Another disappointing set of figures for the manufacturing sector with output continuing to fall – ITEM Club

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Nida Ali, economic advisor to the EY ITEM Club, comments on today’s industrial production and manufacturing figures:

  • Another discouraging set of figures for the manufacturing sector with output likely to have fallen by more than 1.5% in 2012Q4
  • But survey data points to stronger momentum in the sector in 2013, with the recovery hinged largely on increased export demand

“Yet another disappointing set of figures for the manufacturing sector, with output continuing to fall in November after the sharp decline in October. These figures chime in with the gloomy PMI surveys in the first couple of months of the fourth quarter. Manufacturing output is likely to have fallen by about 1.5% in Q4, potentially tipping GDP growth into negative territory.
 
“However, the latest PMI survey for December points to stronger momentum for 2013, providing some hope that the sector has turned a corner. The key question for manufacturers is the degree to which greater signs of stability in the Eurozone and the fiscal agreement in the US translate into stronger export demand. If export demand begins to strengthen, we may see a sustainable manufacturing recovery begin to take hold.”