| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Industrial Production - M/M | 0.1% | 0.7% | -0.2% | -0.1% |
| Industrial Production - Y/Y | -2.9% | -2.0% | -3.1% | -2.7% |
| Manufacturing Output - M/M | -0.1% | 0.7% | 0.0% | 0.1% |
| Manufacturing Output - Y/Y | -2.5% | -1.3% | -2.4% | -1.9% |
Highlights
Industrial production had a surprisingly good March. A 0.7 percent monthly increase was much stronger than the market consensus and its best performance since March 2021. Following a revised 0.1 percent dip in February, annual growth picked up from minus 2.7 percent to minus 2.0 percent, matching its least negative print since February last year.
Manufacturing essentially followed suit, also posting a 0.7 percent advance after a 0.1 percent gain in mid-quarter. Output here has now risen in each of the last four months. The latest increase reflected advances in seven of its 13 subsectors notably pharmaceuticals (4.0 percent) and computer, electronic and optical products (3.3 percent).
Elsewhere, total industrial production was boosted by a 1.1 percent increase in electricity, gas, steam and air conditioning as well as a 1.7 percent gain in water supply. However, oil and gas extraction dropped 0.3 percent.
Today's update leaves first quarter industrial production unchanged at its fourth quarter level but manufacturing output 0.7 percent stronger. Goods production has struggled for a long while now but today's data suggest that at least the worst may now be over. At 13 and 19 respectively, the UK's ECDI and ECDI-P remain above zero and so still indicate slightly faster than expected growth of overall economic activity.
Manufacturing essentially followed suit, also posting a 0.7 percent advance after a 0.1 percent gain in mid-quarter. Output here has now risen in each of the last four months. The latest increase reflected advances in seven of its 13 subsectors notably pharmaceuticals (4.0 percent) and computer, electronic and optical products (3.3 percent).
Elsewhere, total industrial production was boosted by a 1.1 percent increase in electricity, gas, steam and air conditioning as well as a 1.7 percent gain in water supply. However, oil and gas extraction dropped 0.3 percent.
Today's update leaves first quarter industrial production unchanged at its fourth quarter level but manufacturing output 0.7 percent stronger. Goods production has struggled for a long while now but today's data suggest that at least the worst may now be over. At 13 and 19 respectively, the UK's ECDI and ECDI-P remain above zero and so still indicate slightly faster than expected growth of overall economic activity.
Market Consensus Before Announcement
Industrial production is expected to edge 0.1 percent higher in March following a 0.2 percent dip in February. Manufacturing output in March is expected to fall 0.1 percent.
Definition
Industrial production measures the physical output of the mining and quarrying, manufacturing, gas and electric, and water supply and sewerage sectors. Manufacturing is seen as the best guide to underlying developments as the other subsectors can be highly volatile on a short-term basis. Estimates are largely based on a monthly business survey of roughly 6,000 companies.
Description
Industrial and manufacturing outputs are watched carefully by market participants despite the decline in the importance of manufacturing in the UK economy. Manufacturing output is the preferred number rather than industrial production which can be unduly influenced by electrical generation and weather. The manufacturing index is widely used as a short-term economic indicator in its own right by both the Bank of England and the UK government. Market analysts also focus on manufacturing and its sub-sectors to get insight on industry performance.
Industrial production accounts for less than 16 percent of the economy within which the key manufacturing sector is worth about ten percentage points. Total manufacturing is divided into thirteen sub-sectors, ranging from food, drink and tobacco through chemicals and chemical products to electronics and transport equipment. Consequently, this report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.
Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that won't lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.
Industrial production accounts for less than 16 percent of the economy within which the key manufacturing sector is worth about ten percentage points. Total manufacturing is divided into thirteen sub-sectors, ranging from food, drink and tobacco through chemicals and chemical products to electronics and transport equipment. Consequently, this report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.
Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that won't lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.
