Financial News

  • 11 June 2014, 10:19

Manufacturing Growth At Three-Year High

There is further evidence the economic recovery is becoming more broad-based with industrial production and manufacturing growth figures hitting three-year highs.

The Office for National Statistics (ONS) measured a 3% jump in annual industrial production output in April while manufacturing growth topped 4.4% in the same 12-month period.

The performance adds to hopes overall GDP accelerated in the second quarter - with consumer spending continuing to dominate.

It was also seen as evidence the strength of the pound was yet to be significantly felt by exporters.

The ONS said it was the fifth period of month-on-month growth in a row - the longest run ofcontinuous expansion since June 2010 - for manufacturing.

Main contributors included transportequipment as well as computer, electronic and optical products.

The sector remained 7.6% below its pre-downturn peak at the end of the firstquarter of 2014.

David KeRN, chief economist at the British Chambers of Commerce, said: "TheGovernment must keep boosting efforts to support UK exporters and improve accessto finance for growing firms."

A Treasury spokesman responded: "Manufacturing grew at its fastest annual rate inthree years in April.

"This provides further evidence that the Government's longterm economic plan is working, laying the foundations of a broad-basedrecovery."

Ministers are under pressure to boost output and exports as part of efforts to make the UK economy less reliant on consumer spending.

There is concern high household debt levels will start to squeeze spending again - particularly when the base rate of interest starts to rise and the increases are passed on to borrowers, especially mortgage customers not on fixed rate tariffs.

The International Monetary Fund warned last Friday of risks to the UK's recovery from the housing market.

A separate study, released on Tuesday afternoon by the National Institute of Economic and Social Research, concluded that the economy had finally surpassed the pre-recession peak it reached in January 2008 - driven largely by consumers.

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