Belfast Telegraph

Output surge gives three-year high boost to manufacturing

By John Paul Ford-Rojas

Growth in Britain's manufacturing sector jumped to a new three-year high in April after a 4.4% surge in output on the same period in 2013.

The performance was the strongest year-on-year showing since February 2011, adding to hopes that overall GDP accelerated in the second quarter.

The figures from the Office for National Statistics (ONS) showed an improvement in output of 0.4% compared with a month earlier.

And they echo a positive showing for manufacturing in Northern Ireland in the most recent purchasing managers' index survey by Ulster Bank.

Manufacturing experienced a record month in May, according to the PMI, recording the fastest rate of growth in employment since the series began. And while the PMI reported substantial rises in new orders for retail, construction and services as well as manufacturing, the latter was the only sector to see the rate of growth in new orders accelerate in May.

Graeme Maclaughlin, relationship director at Barclays Northern Ireland, said manufacturing growth would be "robust" as 2014 unfolds.

"The growth in manufacturing output continues to be strong and will remain robust as we move further into 2014.

"Manufacturers are expecting improved demand from export markets over the coming months, indicating that the strength of the pound might not have as detrimental an effect on exporters as previously thought.

"This is key if we are to rebalance away from domestic-driven growth."

The ONS said April was the fifth period of month-on-month growth in a row for Britain's manufacturing sector – the longest run of continuous expansion since June 2010.

Main contributors included transport equipment as well as computer, electronic and optical products.

Samuel Tombs of consultancy Capital Economics said the figures "add to the growing body of evidence suggesting the economic recovery might have gathered more pace in the second quarter".

Markit chief economist Chris Williamson said: "Britain's factories are booming, enjoying their best spell of growth for four years.

"The data not only indicate that the recovery has strong momentum, but also that the economy is rebalancing, though there is still a long way to go before manufacturing even regains its pre-recession size."

Manufacturing remained 7.6% below its pre-downturn peak at the end of the first quarter of 2014.

David Kern, chief economist at the British Chambers of Commerce, said: "The Government must keep boosting efforts to support UK exporters and improve access to finance for growing firms."

A Treasury spokesman said: "Manufacturing grew at its fastest annual rate in three years in April. This provides further evidence that the Government's long-term economic plan is working, laying the foundations of a broad-based recovery." Overall industrial production increased by 0.4% month-on-month in April as well. It grew by 3% year-on-year.

Belfast Telegraph