industrial output grew at its fastest rate in six months in March, official data showed yesterday, after an unexpected bounce in oil and gas extraction, easing fears that strong economic growth is starting to slow.
Industrial output rose 0.5 percent in March – the strongest growth since September and above economists’ forecast of no change – after inching up by 0.1 per cent in February, the Office for National Statistics said.
Manufacturing also grew faster than expected, though this comes at the end of 12 months of weak growth for the sector.
For the first quarter as a whole, industrial output rose by 0.1 per cent, in contrast to the 0.1 per cent decline which the ONS had pencilled into its preliminary estimate of first-quarter gross domestic product growth last month.
The ONS said this was insufficient on its own to point to an upward revision of overall GDP growth when a second estimate is published on May 28.
Britain’s economy grew by 2.8 per cent in 2014, the fastest growth rate of any big advanced economy, but lost pace in the first quarter of this year when total output rose by just 0.3 per cent. Yesterday’s data showed manufacturing output rose by 0.4 per cent after upwardly revised growth of 0.5 per cent on the month in February, slightly faster than expected.
But compared with a year earlier, factory output is just 1.1 per cent higher, the weakest growth rate since December 2013.
Oil and gas extraction rose at its fastest rate since February 2014, up 4.9 per cent on the month and bucking a general downward trend, which has been worsened by falling oil prices and rising production costs as North Sea oil gets scarcer. On the year, industrial output as a whole was just 0.7 per cent higher, weighed down by a 5.1 per cent fall in oil and gas production over the same period.
But manufacturing output is almost 5 per cent lower than its pre-crisis peak in early 2008.