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Industry

Production’s “longest losing run” since recession

The UK economy grew by just 0.3% in the three months to November 2018, marking its slowest pace in six months.

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Production contributed negative growth to the economy in the three months up to November

Output in the information and communication industries has continued to demonstrate a steady growth, whilst manufacturing has slumped.

The production sector experienced negative growth in the same period, according to the latest figures from the Office for National Statistics (ONS). The industries included in this sector are; mining and quarrying; manufacturing; electricity and gas; and water supply.

Month-on-month grow in the production industries fell to -0.4%, which in its press release ONS says was driven by weakness in manufacturing, and mining and quarrying. The figures for the rolling three-month saw growth in production fall to -0.08. For the whole year, production as a whole contracted just 0.4%.

Rob Kent-Smith, head of national accounts at the Office for National Statistics, comments on the results: “Growth in the UK economy continued to slow in the three months to November 2018 after performing more strongly through the middle of the year.

This marks the manufacturing sector's longest losing run since the 2008-09 recession

“Accountancy and housebuilding again grew but a number of other areas were sluggish. Manufacturing saw a steep decline, with car production and the often-erratic pharmaceutical industry both performing poorly.”

Ben Brettell, senior economist at Hargreaves Landsdown, told the BBC: “This marks the manufacturing sector's longest losing run since the 2008-09 recession.”

Whilst many have suggested that Brexit uncertainty is contributing to a decrease in sales, the GDP figures could be hinting at other trading issues. Dharshini David, BBC economic correspondent, comments: “They [the figures] suggest demand from our trading partners is faltering. Industry suffered its most widespread fall in output since 2012, with a drop in car production leading the charge.”

He adds: “From Apple to Jaguar Land Rover, some of the biggest global brands have been blaming faltering overseas demand, particularly from China for their woes. They may have a point. Growth across our major trading partners is tailing off.

“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.

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