September factory output boost

Factory output increased in September, according to official figures

Manufacturers have bounced back from a weak August with the biggest monthly rise in output for more than seven years during September, official figures show.

September's 1.7% gain countered a 2% fall in August as factories wound down production for the summer break, the Office for National Statistics (ONS) said.

The better-than-expected figure represented the biggest month-on-month rise since July 2002 as the sector edged towards recovery, the ONS added.

Industrial production - including mining, quarrying and utilities output - was up 1.6% in September, also the biggest monthly gain since July 2002.

But because of revisions to the July and August figures, industrial production over the July-September quarter as a whole was down 0.8%.

This is greater than the 0.7% fall pencilled in by the ONS in its estimates showing a shock 0.4% decline for the overall economy in the third quarter.

Industry surveys from the CBI business group and the Chartered Institute of Purchasing and Supply suggest stronger conditions in October - with manufacturers pulling out of recession for the first time since the beginning of 2008 in the final quarter of 2009.

But the figures show the sector's overall output during the July to September period was 10.5% below the same period last year, despite improving conditions among car manufacturers.

Howard Archer, IHS Global Insight economist, said: "Just as August's slump in output sharply overstated the weakness in the manufacturing sector, so does September's rebound exaggerate the strength.

"The manufacturing sector has clearly improved significantly overall... but sustainable healthy growth is still far from assured."