manufacturing drop suggests triple dip

UK manufacturing output dropped sharply during October, according to the latest data, heightening fears that the country is on the brink of a third recession.

manufacturing drop suggests triple dip


Figures published by the Office for National Statistics showed manufacturing output contracted by 1.3% in October when compared with the previous month. Economists had expected to see a 0.8% gain for the month.

Azad Zangana, European Economist at Schroders, said: “These figures suggest there is a strong chance the UK economy could triple dip in the fourth quarter.

“The weakness in manufacturing and the wider production sector highlights the impact of the Eurozone crisis, as exporters struggle to find sufficient demand.”

Other commentators agreed that the surprise fall does not bode well for the UK economy as it enters the fourth quarter.

Capital Economics UK economist Samuel Tombs said: “Even if October’s fall in production is reversed over the next two months, the sector will knock about 0.3% off Q4 GDP growth.

“And we continue to expect industrial production to fall further in 2013 as the eurozone’s recession deepens and high inflation holds back domestic consumer demand for manufactured goods.”

IHS Global Insight chief UK and European economist Howard Archer described today’s figures as “a dire set of data”. 

“While it has been evident that the manufacturing sector is finding life very tough at the moment, the 1.3% drop in output in October is far worse than expected and very worrying,” Archer said.

“Unless services output can enjoy a strong end to the year, it looks increasingly inevitable that GDP will suffer a renewed drop in the fourth quarter.”



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