Warning after manufacturing slump

Experts have warned that any economic recovery in the UK will be short-lived after official figures revealed a worse-than-expected slump in manufacturing.

Output in the manufacturing sector contracted by 1.1% between July and August following a 3.2% rise the previous month, said the Office for National Statistics (ONS).

The manufacturing figures were dragged lower by a weak performance from transport equipment and machinery firms, which fell 4.5% and 2.5% respectively.

Samuel Tombs, UK economist at Capital Economics, said the economy should still emerge from its double-dip recession in the third quarter, but the underlying picture is weak.


He said Tuesday's figures suggested the underlying trend in gross domestic product (GDP) is "flat at best and therefore undermine hopes that the green shoots of economic recovery are emerging".

The wider index of production, which also includes mining and energy supply, shrank 0.5% in the period, following a 2.9% rise in July.

Within the index of production, the mining and quarrying sector rose by 1.4% and the water and waste management sector rose by 2.1%.

These increases were slightly offset by energy supply output, which dropped 0.6%, driven by a 9.4% drop in gas supply, the ONS added.

The August figures mark a sharp reversal of the growth seen the previous month, but July's data was boosted by a clawback from the losses suffered as a result of the extra bank holiday for the Queen's Diamond Jubilee in June.

The ONS added there was some anecdotal evidence that some businesses had longer summer closures this August, or that closures were held later than in previous years so that they affected August exclusively.

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