UK manufacturing output Preview: Manufacturing set to recover previous slump only partially in November

The UK manufacturing output is expected to rise 0.3% over the month in November after falling -0.9% in the previous month.
The industrial production is set to rise 0.2% over the month after falling -0.7% m/m in October.
Monthly UK GDP is expected to report an anemic growth of 0.1% m/m in November.

Mario Blascak, PhD Independent Analyst

The UK manufacturing sector is expected to continue reporting a lackluster picture of the UK economy in the final quarter of 2018 as global trade tensions and the ongoing Brexit uncertainty weigh on the business confidence and worsen the outlook for 2019.

The UK manufacturing output is expected to rise 0.3% over the month in November after falling sharply by -0.9% m/m in the previous month while the broader measure of UK industrial production is expected to rise 0.2% over the month after falling -0.7% m/m in October, the Office for National Statistics is expected to report on Friday, November 11.

Both UK manufacturing output and the industrial productions are set to fall in November when compared to a year ago, declining -0.7% over the year in both measures.

The broad-based deceleration in the UK manufacturing sector is in line with the forward-looking indicators like the purchasing managers’ index (PMI) that fell to October's 27-month low of 51.1 before recovering somewhat to 53.1 in November.

Still, the deceleration in the activity of the UK manufacturing sector is set to weigh on GDP growth in the final quarter of 2018 with a negligible contribution.

“Based on its relationship against official ONS data, the survey indicators suggest manufacturing output is on course to make no contribution to GDP growth in the final quarter, with a clear risk of output contracting unless December proves a stronger month,” Rob Dobson, Director at IHS Markit compiling the manufacturing PMI survey wrote in the November report.

With trade tensions escalating and Brexit uncertainty weighing, no wonder that the UK GDP growth measured on a monthly basis is set to report only 0.1% monthly rise for November, unchanged from October and up from stagnation in September 2018.

UK manufacturing PMI

Source: IHS Markit

Author

Mario Blascak, PhD

Independent Analyst

Dr. Mário Bla&scaron;čák worked in professional finance and banking for 15 years before moving to journalism. While working for Austrian and German banks, he specialized in covering markets and macroeconomics.

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