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Rise in output fuels recovery hopes

Rise in output fuels recovery hopes

Category: Economy

Updated: 10/06/2009
First Published: 10/06/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A hint of a turnaround in the economic downturn has been provided by a 0.3 per cent increase in production output between March and April, according to figures from the Office for National Statistics.

The surprise rise caught analysts that had been expecting a further reduction of 0.1 per cent on the hop, while manufacturing output also increased, by 0.2 per cent.

According to Graeme Allinson, Head of Manufacturing, Transport and Logistics at Barclays Commercial Bank, output levels that were cut as retail stocks were depleted over the winter are beginning to benefit from a call to replenish stock.

However, it remains to be seen if this will translate into a sustained increase in demand.

"Although the decline in manufacturing persists across Europe, exploiting the advantageous exchange rates with our biggest trading partners in the euro-zone will see the UK well positioned for a pick-up in demand," Mr. Allinson added.

"Diversification, cost management and above all experience of tough times in the past will see British manufacturing turning the corner."

Despite the slight improvement, manufacturing still remains more than 13 per cent down year on year which, according to David Kern, Chief Economist at the British Chambers of Commerce, makes any talk of a recovery at present premature and potential misleading.

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