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UK industrial and construction output weaken in November, trade brighter

Published 09/01/2015, 09:36
Updated 09/01/2015, 09:40
© Reuters. An industrial crane sits next to an apartment block under construction at Chelsea Wharf in London

LONDON (Reuters) - British industrial output and construction lost further momentum in November, but cheaper oil helped cut the country's trade deficit, official figures showed on Friday.

British industrial output sank by 0.1 percent on the month in November, unexpectedly extending October's decline as oil and gas output dropped by more than 5 percent on the month due to maintenance work at North Sea oil fields.

Construction output also fell by 2.0 percent on the month in November, bucking economists expectations of a bounceback as all types of new work other than private housing and infrastructure reported declines.

The figures are likely to reinforce concerns that Britain's economy lost momentum towards the end of last year after stellar growth earlier in 2014, a potential worry for Prime Minister David Cameron as he seeks re-election in May.

Private-sector purchasing managers' surveys for December fell to multi-month lows, prompting survey compiler Markit to estimate that overall gross domestic product growth slowed to 0.5 percent in the last three months of 2014 from 0.7 percent in the third quarter.

However, the British Chambers of Commerce said that its members had reported a pick-up in the final three months of the year.

The detail of the industrial output data was more encouraging too, with manufacturing alone rebounding to grow by 0.7 percent, reversing the previous month's decline and enjoying its fastest growth since April.

Factory output in the year to November is up 2.7 percent, beating a 1.1 percent rise in the wider industrial output measure.

Britain's trade deficit also offered better news, with the deficit in goods narrowing to 8.848 billion pounds in November beating forecasts for it to narrow slightly to 9.4 billion pounds, its narrowest since March.

The total trade deficit in goods and services fell to its lowest since June 2013 at 1.406 billion pounds.

The ONS said that the value of oil imports had fallen to their lowest since October 2010, in part due to cheaper oil prices. Goods export volumes in the three months to November recorded the strongest growth since July 2013 at 3.8 percent.

The ONS also said North Sea oil maintenance work had contributed to a downward revision of October's industrial output, which is now down 0.3 percent on the month from a previous estimate of a 0.1 percent decline.

© Reuters. An industrial crane sits next to an apartment block under construction at Chelsea Wharf in London

Maintenance on one of the North Sea oil fields had been resolved by the end of November, the ONS said.

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