Belfast Telegraph

Falls in car production and construction hamper pick-up in industrial output

A pick-up in Britain's industrial output in June was marred by a slump in car production and a fall in construction as the economy continued to stutter.

Figures from the Office for National Statistics (ONS) showed industrial output rose 0.5% in June month on month, largely down to North Sea oil producers delaying their usual summer maintenance.

Year on year, production was up 0.3% in June following a decline in May.

However, transport equipment manufacturing, including car production, fell 3.6%.

Construction output dropped 0.1%, contracting for the third consecutive month, and fell 1.3% in the second quarter.

The ONS's deputy national statistician Jonathan Athow said: "Manufacturing has been broadly flat with recent falls due to dropping car production offsetting growth earlier this year.

"On the other hand, oil production increased as the usual summer maintenance shutdowns failed to materialise.

"Construction again declined after a strong start to the year with public and commercial building and repair work all falling."

While sterling's slump since the Brexit vote has put consumers under pressure, the pound's weakness was supposed to boost UK exports by making British goods cheaper for overseas buyers.

However, separate data published by the ONS showed that a boost to UK trade again failed to materialise.

The UK's deficit in goods and services, the gap between exports and imports, widened by £2 billion to £4.6 billion between May and June after a slump in exported goods.

For the second quarter as a whole, the deficit rose £100 million to £8.9 billion.

James Smith, economist at ING, said: "This is particularly concerning when you consider the backdrop of a 13% post-Brexit fall in the pound and the significant improvement in global growth prospects (particularly in Europe, a key trading partner for the UK).

"Whilst these developments appear to have boosted sentiment amongst manufacturing firms, according to recent PMIs, we aren't seeing this being translated into the official data."

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