Industrial production as a whole fell 1.7% in August, the largest drop for three years. Hopes for a manufacturing resurgence have been dashed by one of the steepest falls in mining and energy production on record. The problem: conditions out in the North Sea have hampered operations, and many rigs are currently undergoing maintenance.
While the September figures aren’t evidence of a full decline, they do prove that steady growth remains as elusive as ever. The UK’s summer growth spurt is over. At the Bank of England, a dirge plays through the tannoy.
MT is being slightly melodramatic. In fact, this data is not enough to warrant a downward revision to that precious 1% growth for the third quarter. And we were warned that the Olympic revenues would artificially inflate July to September data to the detriment of Q4 GDP. The UK economy will be lucky with an economic flat-line the next three months.
Chris Williamson, chief economist at Markit, recommends that the UK steel itself for a bleak economic winter. ‘Prospects look especially grim for October, with the PMI signalling the steepest fall in goods production for three-and-a-half years,’ he says. ‘Recent survey data also point to a near-stagnation of the far-larger services economy.’
It’s clear that the UK is still failing to shrug off the growth shackles of the previous year. The eurozone, our key export market, is still under the cosh. Asia, hailed as our export salvation, is suffering from the slowdown now too. Meanwhile, back at home, companies are sitting on huge piles of cash rather than spend in an uncertain climate. At least we’re doing better than the rest of Europe, eh?