Factory output takes a surprise dive
MANUFACTURING suffered a shock slump in output in November, casting fresh doubt on hopes of a strong recovery.
Official figures showed factory output fell by 0.7% - the worst performance since October 2002. That left output only 0.7% higher than a year earlier. The decline was broad-based, with nine of the 13 sub-sectors falling.
The fall raised concerns that sterling's surge to 11-year highs against the battered dollar may be starting to take its toll on manufacturing exports.
Economist Jonathan Loynes at Capital Economics said: 'Industry surveys are still pointing to a manufacturing improvement but sterling's strength may limit the extent of any recovery. It is certainly a cloud on the horizon.'
Despite the drop, output for the three months to November was still 0.9% higher than the same period a year ago and up 0.1% on the previous quarter.
Fluctuations in production within the electrical and optical equipment industry were blamed for November's decline.
The Office of National Statistics said output in the sector fell 2.5% on the previous month while the decline in the paper, printing and publishing industry was 1.8%. Food, drink and tobacco output eased 1.4%.
