British industry, down for two consecutive quarters, has slid back into recession.
The Office for National Statistics said industrial production – comprising manufacturing, mining and quarrying, North Sea oil and gas, and water, gas and electricity supply – is 10% lower than it was when the recession took hold in early 2008.
Manufacturing accounts for 70% of industrial output. It has been hit hard by the crisis in the steel sector. Manufacturing production was nearly 2% lower in March this year than a year earlier.
Metal production dropped by 4% over the past year. Mining continued to decline in March, but an increase in energy production, attributed to the colder weather that arrived in the spring, pushed up industrial production overall.
Overall production rallied in March, with strong output from the auto industry and an improvement in pharmaceuticals. But it was not sufficient to counter the sharp falls in January and February which resulted in the quarter’s drop.
David Kern, chief economist at the British Chambers of Commerce, warned that manufacturing remained in long-term decline, despite a modest recovery in March. “While adverse global conditions remain a major challenge for manufacturing, this is now being exacerbated by a slowdown in the domestic economy,” he said.
“A healthy manufacturing base remains critical to the wellbeing of the UK economy in key areas such as innovation, exports and productivity, making it vital that the sector is given more support to compete against global and domestic headwinds.”
Some analysts looked to a weak global demand as one cause as well as uncertainty over the EU referendum.
