UK manufacturing output fell in April, but broader industrial production rose because of a surge in oil and gas extraction, official figures have shown.

 

The 0.4 per cent, seasonally-adjusted month-on-month drop in manufacturing output was another disappointment on the UK economic front, with analysts having forecast it would have risen by 0.1 per cent in April.

And manufacturing output in April was up only 0.2 per cent on the same month of last year, according to the data from the Office for National Statistics, providing further evidence that Chancellor George Osborne's vision of "a Britain carried aloft by the march of the makers" has failed to materialise.

Industrial production, which includes mining and quarrying, oil and gas extraction, and electricity, gas and water supply as well as manufacturing output, rose by 0.4 per cent month-on-month in April. It was boosted significantly by oil and gas extraction, which surged by 8.7 per cent month-on-month.

Referring to the rise in oil and gas extraction, the ONS said: "This was due to increases in crude oil production and NGL (natural gas liquids) from the offshore pipelines and the offshore loaders in some of the North Sea terminals.

"Evidence from the Department of Energy and Climate Change suggested the increases in crude oil production were in line with the rises seen in the global oil supply market."

Oil and gas extraction in April was 9.8 per cent higher than in the same month of last year.

Referring to this year-on-year rise, the ONS said: "This was due to reported increases in crude oil production compared with last year, when planned maintenance in a number of terminals hampered production."

Seven of the 13 UK manufacturing sub-sectors recorded a month-on-month decline in output in April, with a particularly sharp fall in the pharmaceuticals category.

Comparing the February to April period with the preceding three months, UK manufacturing output was up by just 0.2 per cent.

Howard Archer, chief UK economist at consultancy IHS Global Insight, said: "Industrial production got off to a decent start to the second quarter as it grew 0.4 per cent month-on-month in April, thereby lifting hopes that it can make a solid contribution to growth after only edging up in the first quarter. Industrial production was lifted in April by a jump in output in the volatile oil and gas extraction sector."

However, he added: "April's good news on industrial production was tempered by a 0.4 per cent month-on-month fall in manufacturing output."

And Mr Archer warned: "It is important for balanced UK growth that the manufacturing sector can achieve sustained, decent expansion.  While growth in the UK will always be driven by the dominant services sector, it has recently looked particularly unbalanced."

Samuel Tombs, senior UK economist at consultancy Capital Economics, said: "Following a 0.6 per cent monthly increase in March, industrial production rose by 0.4 per cent in April - the biggest rise over two months since March 2014.

"Granted, April's rise entirely reflected a 8.7 per cent surge in oil and gas extraction, which is likely to have been linked to the rebound in the oil price. Since the oil price has levelled off since April, output in this sector is unlikely to grow much further. By contrast, core manufacturing output fell by 0.4 per cent."