Sluggish manufacturing drags GDP growth down to 0.3%

  • Sluggish manufacturing drags GDP growth down to 0.3%

Sluggish manufacturing drags GDP growth down to 0.3%

If GDP grows at a similar pace in December, growth in the final three months of the 2018 would halve to 0.3 percent, one of the weakest calendar quarters since the 2016 Brexit referendum.

Rob Kent-Smith, head of national accounts at the ONS, said: "Growth in the United Kingdom economy continued to slow in the three months to November after performing more strongly through the middle of the year".

According to the ONS, GDP growth was flat in September, before rising...

The data reveals that on a rolling three-month basis, the manufacturing sector shrank by 0.8% and month-on-month it fell 0.3%.

"Accountancy and house building again grew but a number of other areas were sluggish". Disappointments in auto production should come as no surprise if we consider the recent news from Jaguar Landrover in which the UK's largest motor manufacturer announced it is embarking on a headcount cull in response to falling global demand for its vehicles.

"Manufacturing saw a steep decline, with vehicle production and the often-erratic pharmaceutical industry both performing poorly", says Rob Kent-Smith, Head of National Accounts at the ONS.

Industrial production as a whole contracted by 0.8% in the three months to November amid a global slowdown, fuelled by a trade spat between the United States and China seek.

The dominant services sector gained 0.3 percent in November and construction grew 0.6 percent.

Production as a whole contracted 0.4%.

Other data from the ONS today disappointed with industrial production and manufacturing production data coming in below expectation, although it is worth pointing out at the outset that disappointments here pale in comparison to the poor numbers we have seen coming out of Germany, France and Italy over recent days.

They suggest demand from our trading partners is faltering. Industrial production read at -0.4%, where markets were expecting a reading of 0.3%.

We already know that November was a awful month for retailers (the worst on record according to Sports Direct boss Mike Ashley), but how is the rest of the economy holding up? Vehicle output was flat and falling demand in China, the world's largest auto market, and newly announced job cuts at Ford and Jaguar Land Rover underline the risks facing the sector. They may have a point.

Despite the fall in the pound since the Brexit referendum, the contribution to growth from trade has been disappointing and major export markets are now cooling.

It's a timely reminder that, whatever arrangements are in place come the end of March, we may not be able to rely on our economic allies overseas to keep our factories and workshops thriving.

"There are two factors at work here".

Worries about the global economy have been mounting due to concerns about a trade war between the USA and China.

"UK companies are also dealing with a significant Brexit headwind, with heightened levels of uncertainty putting business off investment and damaging consumer confidence".