- Production output rose by 0.6% between Q1 2013 and Q2 2013. Manufacturing rose by 0.7% over the same period.
- By far the largest contribution to the quarterly growth in production came from manufacturing, which increased by 0.7% following a decline of 0.2% in Q1 2013.
- Looking at the broader picture, production output was 1.2% higher in June 2013 compared with June 2012, reflecting a 2.0% rise in manufacturing; 7.8% rise in water supply, sewerage & waste management; 4.4% fall in mining & quarrying; and 3.3% fall in electricity, gas steam & air conditioning.
- Production rose by 1.1% between May 2013 and June 2013. Manufacturing rose by 1.9% with reported rises in all of its sectors. The highest contributor to the rise was the manufacturing of transport equipment, which rose by 5.3% and contributed 0.7 percentage points to the rise in manufacturing.
- The preliminary estimate of GDP, published on 25 June 2013, contained a forecasted rise of 0.6% for production in Q2 2013. This release of data also estimates production rose by 0.6% between Q1 2013 and Q2 2013 and therefore has no impact on the previously published Q2 2013 GDP estimate.
Good UK industrial production figures just out - especially manufacturing. Welcome news. http://t.co/YE5pg3KEZV
— Frances Coppola (@Frances_Coppola) August 6, 2013
Fortunately someone was sharper than me:
@Frances_Coppola really value your work but please read whole pdf first: "3 months on the same 3 months a year ago" manuf -0.6, prod -0.8
— Ike Onkerr (@PeterPannier) August 6, 2013
It seems things aren't quite as rosy as ONS implies. Production is actually significantly below where it was in the same quarter a year ago. The "good news" is only an improvement in one month's figures.
But in fact it's much worse than that. This chart from the ONS's release shows how far UK industrial production has fallen since the financial crisis (larger version here):
What appals me about this chart is not the collapse of production in 2007/8, awful though is, but the fall in production since 2010. Even with the upturn, total production is now below the level that it was in the 2009 recession, and manufacturing has also fallen significantly since 2011. There must have been some kind of serious negative shock to production in 2010/11 to cause such significant falls.
I have previously argued that double-digit inflation in domestic and industrial energy prices delivered a significant supply-side shock to the economy in the last quarter of 2010 and thereafter. I suggest that this chart supports my case, although others have alternative explanations.
However, whatever the cause of the evident shock to production in 2010/11, the fact remains that UK production is way below even its 2010 level, let alone its level prior to the financial crisis. The slight upturn this month, while encouraging, is certainly not the "UK recovery" that is being trumpeted. There must be a much more substantial and sustained rise in both manufacturing and production indices before we can really claim that that the UK economy is on the mend. There is still an awfully long way to go.
One swallow does not make a summer. And one month's good production figures do not make a recovery.
Index of production, June 2013 - ONS
What derailed the UK recovery? - Coppola Comment
How Mervyn King lost the battle of Britain's banks - Simon Nixon, WSJ
Austerity pushes UK economy towards triple-dip recession - Think Progress (Jan 2013)