UK Industrial Output Falls For Third Month; Trade Deficit Widens

UK industrial production declined for the third consecutive month in March and the trade gap widened notably on higher imports, erasing hopes for an upward revision to the first quarter growth.

Industrial production fell 0.5 percent month-on-month, following a 0.8 percent drop in February, data from the Office for National Statistics showed Thursday.

This was the third consecutive decrease in output. Production was expected to fall 0.4 percent.

Likewise, manufacturing output slid 0.6 percent after easing 0.3 percent in the previous month. Economists had forecast a moderate 0.2 percent fall for March.

On a yearly basis, growth in industrial production slowed more-than-expected to 1.4 percent in March from 2.5 percent in February.

This was the weakest expansion in the current sequence of five-month period of growth. The expected pace of growth was 1.9 percent.

Manufacturing output growth came in at 2.3 percent, while economists forecast the rate to remain unchanged at 3 percent.

In a separate communique, the ONS said construction output grew 2.4 percent annually in March, representing the 12th consecutive period of growth.

In the first quarter, industrial output grew only 0.1 percent sequentially. For GDP calculation, ONS had estimated that industrial production climbed 0.3 percent and construction growth at 0.2 percent, in line with today's publication.

Another report from the ONS showed that the total trade deficit rose to a 6-month high in March. The total trade deficit widened to GBP 4.9 billion from GBP 2.65 billion in the previous month.

The visible trade deficit increased to GBP 13.44 billion from GBP 11.44 billion in February. The expected level was GBP 11.6 billion.

In the first quarter, the total trade deficit rose by GBP 5.7 billion to GBP 10.5 billion. This reflected a 3.3 percent rise in imports amid a 0.5 percent fall in exports.

The visible trade deficit widened to GBP 36.87 billion from GBP 31.64 billion in the prior quarter.

Today's activity data re-affirmed that the economy lost some momentum in the first quarter but showed some signs that GDP growth is becoming slightly better balanced, Scott Bowman, a UK economist at Capital Economics, said.

Sterling vs Yen (FX:GBPJPY)
Graphique Historique de la Devise
De Mar 2024 à Avr 2024