Industrial Output is Up
The ONS reported that industrial output rise by 1.1%, beating economists’ expectations that growth in the sector would be just 0.9%
The broad indicator of British industrial output, whilst beating experts’ forecasts, is still quite weak and doesn’t do much to help the overall figures for the quarter. The UK economy actually shrank in Q4 2012 and, further contraction up to the end of March would spell a third recesssion.
With yesterday’s news that business confidence is on the increase, fears of a triple-dip recession may be subsiding.
Industrial output for Q4 2012 was down 1.9% on Q3 and still 1.5% down on Q4 of 2011.
A contributing factor to the poor fourth quarter was the shutting down of North Sea oil fields which pushed the figure down by 1.9%
The return of oil and gas production is expected to positively affect the industrial output figures over the next few months, after the shutdowns for extended maintainence and further severe weather.
Manufacturing, a subset of the industrial output, did rise by 1.6% in December but again, is still lower than it was during the same period last year. Manufacturing had fallen by 0.3% in November so an uptick, even a small one, was welcome.
In other good news, the country’s goods trade deficit narrowed in December. In November, the UK trade deficit was £9.27 billion but that has reduced to £8.89 billion. Again, whilst still high, that is a move in the right direction.
With speculation about further Quantitative Easing and the Bank of England’s Monetary Policy Committee decision expected tomorrow (Thursday) there is scope for a good Q1 in 2013, avoiding the dreaded treble-dip.