Industrial production back in full swing - EY ITEM Club

8 April 2014

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  • Recovery in industry picks up pace
  • …driven by manufacturing and oil and gas
  • …and pointing to GDP growth in Q1 potentially hitting 1%

Martin Beck senior economic adviser to the EY ITEM Club comments on today’s industrial production numbers:

“February’s industrial production numbers suggest that the sector’s recovery is back in full swing following the modest performance seen in January. On a monthly basis, industrial output saw its strongest expansion since last June. Admittedly, this was partly driven by a bounce back in oil and gas production which saw a hefty fall in January. But the rise in overall production in February was broad-based, with most industrial sub-sectors seeing expansion.

“Output in manufacturing was one of the star performers, rising for the third consecutive month and at the fastest monthly pace since September. Moreover, annual growth was the strongest for three years. So rather than the ongoing strength of the pound derailing the sector’s recovery, the latest BCC survey released today showed the best goods export performance since 1994. Expansion in manufacturing was driven by pharmaceuticals, food and transport, with the latter consistent with recent strong growth in car registrations.

“February’s healthy numbers for industrial output point to growth in the sector for Q1 as a whole coming at around 1%. We expect that quarterly GDP growth could also expand at a similar rate, with the risks potentially lying to the upside. So a strong and increasingly better balanced recovery continues.”