Output in the UK manufacturing sector fell for the sixth consecutive month in August to record its longest period of decline for 28 years, official figures showed today.
The Office for National Statistics (ONS) said manufacturing output dropped 0.4% during the month, double the 0.2% drop expected by analysts.
The last time output fell for six months in a row was between July and December 1980.
Falling production of transport equipment such as motor vehicles was the main drag on industry between July and August, the ONS said, down 2.3% during the month. Data yesterday showed sales of new cars plunged by 21.2% last month, the worst performance since 1991.
Paul Dales, at Capital Economics, said August's manufacturing contraction, which was 1.9% lower than a year ago, meant the sector was on course to shrink by 1.1% between July and September.
The ONS's overall index of production for August — which measures wider industrial output including oil and gas output — was down 0.6% on the previous month and 2.3% on the year.
As well as declines for manufacturing, mining and quarrying production fell back along with electricity and gas supply and major machinery production.
Global Insight economist Howard Archer said: “Sharply contracting industrial production in August adds to the current stream of weak data and survey evidence on the UK economy and reinforces belief that the economy contracted in the third quarter and is well on its way into recession.”
He called for the Bank of England's Monetary Policy Committee (MPC) to slash interest rates by 0.5% later this week, a move also called for by the CBI yesterday.
The British Chambers of Commerce (BCC) warned that the UK was already in a recession with business confidence, profits and turnover now at record lows.
The business group said that an interest rate cut by the MPC on Thursday would be the “right thing to do”.
Last week other manufacturing data showed that firms slid deeper into recession during September. The latest purchasing managers' index for the industry showed a reading of 41 — where a score below 50 indicates contraction — the worst result in the 17-year history of the survey.