| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Industrial Production - M/M | -0.2% | -0.7% | -0.7% | -1.1% |
| Industrial Production - Y/Y | 1.5% | 1.3% | 0.4% | 1.0% |
| Manufacturing Output - M/M | -0.3% | -0.8% | -0.8% | -1.2% |
| Manufacturing Output - Y/Y | 3.5% | 2.8% | 3.0% | 3.1% |
Highlights
Industrial production extended its downswing in August. A 0.7 percent monthly fall followed a steeper revised 1.1 percent drop in July and was more than three times the market consensus. Production has now weakened in three of the last four months but annual growth still edged up from 1.0 percent to 1.3 percent on the back of positive base effects.
Manufacturing fared no better, posting a 0.8 percent monthly slide after a 1.2 percent decrease previously. The fall here reflected losses in nine of the 13 subsectors, most notably computer, electronic and optical products (3.2 percent) and other manufactured products (3.4 percent).
Elsewhere, total industrial production was boosted by a 2.9 percent gain in mining and quarrying but depressed by declines in water supply and sewerage (1.6 percent) and electricity and gas (1.8 percent).
The data remain very volatile but, ignoring revisions, today's update leaves overall goods production needing more than a 0.4 percent monthly rise in September just to keep the third quarter flat. As such, the sector could easily subtract from real GDP growth having provided a lift in the second quarter. That said, with the UK RPI now at 10 and the RPI-P at 7, economic activity in general is performing much as expected.
Manufacturing fared no better, posting a 0.8 percent monthly slide after a 1.2 percent decrease previously. The fall here reflected losses in nine of the 13 subsectors, most notably computer, electronic and optical products (3.2 percent) and other manufactured products (3.4 percent).
Elsewhere, total industrial production was boosted by a 2.9 percent gain in mining and quarrying but depressed by declines in water supply and sewerage (1.6 percent) and electricity and gas (1.8 percent).
The data remain very volatile but, ignoring revisions, today's update leaves overall goods production needing more than a 0.4 percent monthly rise in September just to keep the third quarter flat. As such, the sector could easily subtract from real GDP growth having provided a lift in the second quarter. That said, with the UK RPI now at 10 and the RPI-P at 7, economic activity in general is performing much as expected.
Market Consensus Before Announcement
Industrial production is expected to fall 0.2 percent in August following a 0.7 percent decline in July that reversed only a portion of June's 1.8 percent surge. Manufacturing output, which fell 0.8 percent in July but jumped 2.4 percent in June, is expected to fall 0.3 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.
