| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Industrial Production - M/M | 0.3% | 0.2% to 0.6% | 0.5% | -0.8% | -0.7% |
| Industrial Production - Y/Y | -0.4% | -1.7% to -0.2% | -1.6% | -1.2% | -2.2% |
| Manufacturing Output - M/M | 0.3% | 0.3% to 0.9% | 1.1% | -1.0% | -1.2% |
| Manufacturing Output - Y/Y | -0.3% | -0.3% | -1.3% | -2.0% |
Highlights
Industrial production rose 0.5 percent on the month in August, a welcome recovery, following a minor revised decline of 0.7 percent in July and slightly stronger than the market consensus. Manufacturing was instrumental in the expansion, with a 1.1 percent increase, primarily due to the gains in critical subsectors such as basic metals and transport equipment, where output rose 2.1 percent and 2.3 percent respectively.
Overall goods production was also boosted by electricity and gas which increased by 1.2 percent and water supply and sewerage which rose 1.5 percent. Nevertheless, the mining and quarrying industries contracted 4.0 percent with crude petroleum and natural gas extraction down 4.2 percent, the most precipitous decline since January 2023.
The broader three-month period to August showed no change in overall output. Manufacturing, water supply, and sewerage demonstrated resilience, with respective increases of 0.5 percent and 0.3 percent but these gains were counterbalanced by declines in electricity and gas.
The divergence in sector performance highlights a mixed economic landscape, where industrial growth heavily relies on specific sectors while the others face persistent challenges. The latest reports take the UK RPI to 23 and RPI-P to 22, indicating that the UK economy is performing above market expectations.
Overall goods production was also boosted by electricity and gas which increased by 1.2 percent and water supply and sewerage which rose 1.5 percent. Nevertheless, the mining and quarrying industries contracted 4.0 percent with crude petroleum and natural gas extraction down 4.2 percent, the most precipitous decline since January 2023.
The broader three-month period to August showed no change in overall output. Manufacturing, water supply, and sewerage demonstrated resilience, with respective increases of 0.5 percent and 0.3 percent but these gains were counterbalanced by declines in electricity and gas.
The divergence in sector performance highlights a mixed economic landscape, where industrial growth heavily relies on specific sectors while the others face persistent challenges. The latest reports take the UK RPI to 23 and RPI-P to 22, indicating that the UK economy is performing above market expectations.
Market Consensus Before Announcement
UK industrial production is expected to increase a monthly 0.3 percent after declining 0.8 percent in July with manufacturing output also up 0.3 percent after a 1.0 percent drop last time.
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.
