U.K. Industrial Output Rebounds; Construction Falls Unexpectedly
(RTTNews) - U.K. industrial production recovered at a faster-than-expected pace on higher oil and gas extraction in November, while construction output shrank from October, official data showed Wednesday.
Industrial output climbed 2.1 percent in November from October, when production eased 1.1 percent, the Office for National Statistics reported Wednesday. Production grew the most since April. Output was expected to rise only by 1 percent.
Similarly, manufacturing output climbed 1.3 percent in contrast to the previous month's 1 percent decrease. The 1.3 percent expansion was the biggest since April 2016 and better than the forecast of 0.5 percent.
Following the end of a maintenance period, oil and gas production surged 10.3 percent in November.
Year-on-year, industrial output rebounded 2 percent after falling 0.9 percent in October. This was the fastest growth since July and exceeded the expected 0.7 percent rise.
Likewise, manufacturing output expanded 1.2 percent, reversing October's 0.5 percent decrease. A similar faster growth was last seen in January 2015 and stayed above the forecast of 0.4 percent.
Construction output fell 0.2 percent in November from October largely due to a contraction in non-housing repair and maintenance.
The monthly decline was followed by a 0.6 percent decrease in October and confounded the expected growth of 0.2 percent.
The combined industry and construction sectors are likely to drag on GDP growth in the fourth quarter, albeit probably by less than in the third quarter, Paul Hollingsworth, a UK economist at Capital Economics, said.
Another report from the ONS showed that the visible trade deficit widened more-than-expected to GBP 12.2 billion from GBP 9.9 billion in the prior month as the shortfall with both EU and non-EU countries increased from October.
Economists had expected the deficit to rise to GBP 11.5 billion.
At the same time, the surplus on services shrank to GBP 8.0 billion from GBP 8.3 billion. As a result, the total trade deficit including goods and services widened to GBP 4.2 billion in November from GBP 1.5 billion a month ago.
The ONS said the sectors other than services have been erratic and far more subdued. Taken together, the short-term indicators show overall UK economic activity has continued to grow in recent months, the statistical office added.
A mixed set of November economic releases for the UK economy which on balance kept the economy in with a good chance of recording ongoing resilient GDP growth in the fourth quarter, IHS Markit economist Howard Archer, said.
He said growth in the fourth quarter will once again likely have been largely reliant on services output and consumer spending.