The UK still does have a manufacturing base, but traditional heavy industries such as steelmaking and shipbuilding are all but relegated to the history books. However, production of pharmaceuticals, processed foods, beverages, transportation equipment and (finished) tobacco products all contributed to higher levels of output. According to the Office for National Statistics, output in February picked up by 1% over January’s level, delivering the best performance since September. Output in February was up by 3.8% on a year-on-year basis.
Industrial output (which is not the same beast as it includes electrical power generation and North Sea oil production in addition to the manufacturing data) rose by 0.9% in February. Production from the North Sea was reduced in January due to adverse weather conditions, but again, the year-on-year increase for industrial output in February was a relatively healthy 2.7%. Averaged out over a three month window, industrial output has improved by 0.8% over the preceding period.
However, UK manufacturing output has still a long way to go before it reaches pre-crisis levels; it remains 8.2% below the level seen in the early months of 2008.
A British Chambers of Commerce (BCC) sponsored survey which looked at six key manufacturing indexes such as investment plans, had hit a a record high. The BCC’s chief economist, David Kern welcomed the February data but noted that it was: “… important to reinforce efforts to broaden the recovery towards investment and exports. At the same time, the government must continue its efforts to boost access to finance for growing firms". The UK Chancellor of the Exchequer, George Osborne, announced measures in March which were designed to help UK manufacturing in a bid to “rebalance” the UK economy which is dominated by its service sector. Mr Kern noted that whilst manufacturing was “relatively modest” within the economy, it was “hugely important” to the wider UK recovery.