Rise in industrial production masks manufacturing weakness - EY ITEM Club comments
7 September 2016
- Industrial production rises in July…
- …but this masks manufacturing weakness
- Weaker pound should eventually provide some fillip
Martin Beck, senior economic advisor to the EY ITEM Club, comments:
“Industrial production rose in July, but this masked significant divergences between the sub-sectors. In the first of the official output releases relating exclusively to the post-referendum period, manufacturing output slumped by 0.9%. Production rose in the other sub-sectors, most notably extraction where output increased by 4.7% on the month.
“Coming on the back of soft figures in the two previous months, manufacturing output is likely to see a decline in Q3 as a whole. However, the much larger services sector looks likely to remain strong enough to keep GDP growth in positive territory. We are optimistic that the manufacturing sector will show signs of recovery around the turn of the year, as the benefits of the recent sharp depreciation of sterling begin to feed through.”