Manufacturing sector continues to show slow recovery |
|
|
|
Published
:
Wed, 07 Sep 2005 09:05
|
LONDON - The Office for National Statistics (ONS) today revealed that the manufacturing sector continued to improve for the fourth consecutive month with a 0.1 percent rise in July. This unexpected showing carried the annual growth rate to over 0.2 percent.
Tuesday's report also gives cause for hope that the manufacturing sector is finally waking up from a long drawn slumber when output was hit and jobs were falling right, left and center. Today's report also reinforces the longest run of positive results in over five years and coming on the back of near-recession like conditions in the first quarter of the year, gives hope that good times are on the horizon for the sector. However, the decline in industrial output is bound to compel the Bank of England's Monetary Policy Committee to hold the interest rates steady at 4.5 percent. Last month the MPC had instituted a quarter point rate cut.
The industrial production results as a whole including the oil, gas and mining sectors dipped by 0.3 percent in July, but the manufacturing output grew by the same number. The transport equipment sector including the car, aircraft and train production segments were the biggest contributors to July's growth curve. This was a sure sign that the sector was slowly recovering after the dramatic collapse of MG Rover in April, which affected the overall production. Manufacturing also showed good gains in the cigarette, alcoholic drinks and confectionary segments.
The British Chambers of Commerce was not that happy about these figures and said that the growth over the past three months was 0.6 percent less than that during the same time last year. "The sector continues to face huge pressures," said David Kern, the economic advisor at the BCC. "In spite of the minimal increase in output seen in July, the sector is persistently failing to establish a sustainable recovery." Geoffrey Dicks, economist at RBS Financial Markets was of the opinion that the slow recovery process had begun, "It is a long slow grind out of recession for manufacturing but July saw the trend continuing such that in both year-on-year and 3-month-on-3-month terms we are back in positive territory," he said.
|
|
|
|
|
|
Print this Story
