Manufacturing output tumbles
Manufacturing output tumbles
Friday 9th January 2009
Manufacturing output fell sharply by 7.4 per cent in November from last year, the biggest fall since 1981.The declines were sharpest in the transport equipment and the metal sectors but there were widespread fall across the whole industry, the Office for National Statistics (ONS).
Car manufacturers have been hard hit by the downturn and have slashed production as sales slump.
Nissan is the latest carmaker to announce job losses and plans to axe 1,200 employees this year.
Although the industrial sector accounts for only 18 per cent of the UK's GDP, the dramatic drop in production signals a larger contraction in the economy during the fourth quarter, analysts believe.
"The very sharp drop in manufacturing output in November intensifies fears about the potential depth and length of the recession, and heightens pressure on the Bank of England to keep cutting interest rates," said Howard Archer, economist with Global Insight.
"We expect GDP to contract by 2.8 per cent in 2009, and there is a very real danger that the decline could be even larger," Dr Archer added.
However, factory gate prices rose just 4.7 per cent in the year to December, compared to last month's rise of 5.1 per cent, reflecting a fall in the cost of oil.
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