British economy hit by 'steep decline' in manufacturing

January 11, 2019

British manufacturing has witnessed a "steep decline" contributing to a continued economic slowdown, official figures show.

The nation's GDP grew by 0.3% in the three months to November, according to the Office for National Statistics (ONS).

This is compared to growth of 0.4% recorded in the three months to October.

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%.

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The ONS said the biggest brake on growth came from a drop in car production of 4.3%.

The fall follows factory shutdowns, such as at Jaguar Land Rover, weaker consumer demand and declining diesel sales.

ONS head of national accounts Rob Kent-Smith said: "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.

"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."

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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 US and China seek.

This is in line with Germany and France, which have also recorded falling industrial output.

Month-on-month, the UK economy grew by 0.2% in November, compared with growth of 0.1% in October.

Construction grew by 0.6% in November, while services activity rose 0.3%.

Mike Jakeman, senior economist at PwC, said: "The latest monthly GDP data adds to existing impressions that the economy is slowing as uncertainty over Brexit intensifies.

"The clear loss of momentum in the UK economy since the summer is as expected, given the ongoing lack of clarity on Brexit.

"For as long as this remains unclear, businesses will continue to defer major investment plans and households will reconsider making big-ticket purchases."

Month on month, construction grew 0.6% in November. Manufacturing contracted 0.3%, while services activity rose 0.3%.

Separate ONS figures showed Britain's total trade deficit narrowed by £200m to £7.9bn in the three months to November 2018 as both goods and services exports increased £100m more than their respective imports.

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