| Actual | Previous | Revised | |
|---|---|---|---|
| Industrial Production - M/M | -0.9% | -0.6% | |
| Industrial Production - Y/Y | -0.3% | -0.3% | |
| Manufacturing Output - M/M | -1.0% | -0.9% | -0.7% |
| Manufacturing Output - Y/Y | 0.3% | 0.4% | 1.3% |
Highlights
UK monthly production output slipped by 0.9 percent in May 2025, marking the third consecutive monthly decline and signalling persistent strain in the industrial sector. The contraction was largely driven by sharp falls in manufacturing (minus 1.0 percent) and mining and quarrying (minus 3.2 percent), reflecting subdued demand, supply chain frictions, or energy cost pressures.
Within manufacturing, 9 out of 13 subsectors experienced downturns, with pharmaceuticals plunging 4.2 percent, possibly indicating weaker global orders or supply disruptions. Transport equipment and basic metals also declined, reinforcing the narrative of weakened industrial momentum. However, a 3.4 percent surge in machinery and equipment provided a silver lining, hinting at ongoing investment in capital goods.
Interestingly, water supply and sewerage emerged as the strongest positive force, up 0.8 percent monthly and 3.7 percent quarterly, suggesting growing infrastructure resilience or increased environmental investment. Electricity and gas, while slightly up in May (0.3 percent), remained a quarterly drag (minus 2.8 percent), reflecting volatility in the energy sector.
In essence, the sector shows signs of resilience but remains vulnerable, especially amid ongoing structural and energy-related pressures, taking the RPI to minus 7 and the RPI-P to 1. This means that economic activities are now within the expectations of the UK economy.
Within manufacturing, 9 out of 13 subsectors experienced downturns, with pharmaceuticals plunging 4.2 percent, possibly indicating weaker global orders or supply disruptions. Transport equipment and basic metals also declined, reinforcing the narrative of weakened industrial momentum. However, a 3.4 percent surge in machinery and equipment provided a silver lining, hinting at ongoing investment in capital goods.
Interestingly, water supply and sewerage emerged as the strongest positive force, up 0.8 percent monthly and 3.7 percent quarterly, suggesting growing infrastructure resilience or increased environmental investment. Electricity and gas, while slightly up in May (0.3 percent), remained a quarterly drag (minus 2.8 percent), reflecting volatility in the energy sector.
In essence, the sector shows signs of resilience but remains vulnerable, especially amid ongoing structural and energy-related pressures, taking the RPI to minus 7 and the RPI-P to 1. This means that economic activities are now within the expectations of the UK economy.
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.
