January’s industry figures ‘chilling’
Hopes of a stronger economic recovery in the first quarter were dented yesterday after official figures revealed a sharp fall in manufacturing output during snowbound January.
Industrial production fell by 0.4% in January compared with the previous month — much lower than the 0.3% rise pencilled in by economists.
Within the sector, the manufacturing industry suffered an even bigger 0.9% decline between December and January in what marked the first month-on-month fall since August, according to the Office for National Statistics (ONS).
January's freezing weather conditions were largely to blame for the worse-than-expected figures, which called an abrupt halt to the revival seen at the end of last year.
Manufacturing activity had surged by 0.9% in December, which also affected January’s month-on-month comparison.
Graeme Maclaughlin, relationship director with Barclays Corporate Northern Ireland, said there was still cause for optimism for Northern Ireland manufacturers.
“With the possibility of figures still being a little turbulent from month to month, positivity in the manufacturing sector is mounting nonetheless. Uncertainty over tax increases, government spending cuts and election results may slow recovery somewhat, although international trade could see the benefit of this uncertainty as the recent depreciation of the pound will likely bolster UK exports in the long term,” he said.
“With a healthy focus from political parties on Northern Ireland manufacturing, hopes will be for continued support of the sector which will help cement a more positive position moving forwards.
“Unlike the rest of the UK where exports have plunged, Northern Ireland continues to develop these markets through trade missions — most recently to India and the Far East by some of the province’s major manufacturing companies.”
David Kern, chief economist at the British Chambers of Commerce (BCC), warned: “The new figures were worse than expected, even after making allowances for the adverse effect of January's bad weather. There is now a serious possibility that gross domestic product (GDP) in the first quarter of this year will show a slowdown compared with the last quarter of 2009.”