UK GDP hits lowest since 2012, chems manufacturing falls 2.3% Jul-Oct

Author: Morgan Condon


LONDON (ICIS)--UK GDP remained flat in the three months to October, as increases in the services sector were offset by falls in manufacturing as factories continued to record weak performance, the Office for National Statistics said on Tuesday.

This is the slowest GDP growth since March 2012 in the run up to the UK general election on 12 December and on the back of ongoing Brexit negotiations.

Manufacturing output for the chemicals sector for the same period fell by 2.3%, which was partly attributed to the impact of maintenance and shutdowns of plants in the country.

The trade deficit widened by £2.3bn to £7.2bn between July-October, as imports grew faster than exports – totalling £1.1bn, to £4.4bn accounting for inflation.

The chemicals sector made up £1.5bn of the overall widening trade deficit, with exports in the industry increasing to £1.4bn.

Imports of chemicals from the EU increased by £1.3bn, but the sector was the key driver of exports to the EU, rising by £0.6bn.

The Index of Production fell by 0.7% in the three months to October, followed by a 0.3% slide in the chemicals-intensive construction sector.

Declines in construction in the three-month period were driven by a fall in private housing repair and maintenance and new private housing.

For the month of October, overall production marking gains of 0.1% on September with manufacturing recorded a 0.2% increase on the previous month driven by the pharmaceuticals and food industries.

Growth of manufacturing in these sectors was reflected in March 2019, ahead of the initial proposed Brexit deadline.

This is in contrast to a 2.3% monthly decline in construction for October as private new housing and infrastructure fell by 4.7% and 4.3% respectively.

The ONS said: “Growth has been volatile over the last year, in part as a result of changes to the timing of activity in anticipation of the UK’s original planned departure from the EU at the end of March 2019.”

Thumbnail picture source: Amer Ghazzal/Shutterstock