Oil and gas fires up industrial production – but manufacturing output slides
Industrial output rose by 0.4 per cent in April, according to figures from the Office for National Statistics (ONS), beating economists' forecasts of a 0.1 per cent rise.
The bumper figure was driven by mining and quarrying which rose by 5.6 per cent – and this was helped along by oil and gas extraction which increased by 8.7 per cent month-on-month.
However manufacturing output fell 0.4 per cent from a month earlier, missing economists' forecast for a 0.1 per cent rise, due to the pharmaceuticals sector.
The figures showed pharmaceuticals output fell by six percent in April, having risen 6.8 percent a month earlier.
(Source: ONS)
On course to beat disappointing first quarter growth
Economists said industrial output puts the UK economy on course to beat disappointing first quarter gross domestic product growth of just 0.3 per cent.
"Looking forward, prospects for production over the rest of the second quarter look fairly subdued and exporters face an additional burden from signs that the Eurozone's recovery may already be losing steam," Martin Beck, senior economic advisor to the EY Item Club, said.
"However, while very early days, April's industrial production number, combined with survey evidence from other sectors of the economy still points to quarterly gross domestic product growth in Q2 outstripping Q1's."
But economists flagged weak manufacturing sector
But others warned that the disappointing manufacturing figure could weigh on the economy's ability to gain momentum.
“A slump in factory output in April represents a very disappointing start to the second quarter, and casts doubt on widespread expectations that the economy is picking up speed after the sluggish start to the year," Chris Williamson, chief economist at Markit, said.
Data released yesterday showed that the amount Britain exports minus its imports narrowed to £1.2bn in April, from £3.1bn in March, nevertheless economists said that the impact on future growth would be limited.
Weak exports were a big contributor to the UK's disappointing first quarter economic growth of 0.3 per cent.
Read more: UK trade deficit narrows to 13-month low
The ONS has also revised up its estimate for industrial output in the first quarter to 0.2 per cent from 0.1 per cent, but it said this wouldn't have a significant impact on the disappointing gross domestic product figure.
"There was minimal impact on previously published gross domestic product estimates resulting from revisions to these periods," it said.