UK manufacturing gets Bank Holiday boost
By PRW Staff
Posted 11 July 2012
New figures have revealed that UK manufacturing rose by 1.2% in May, compared with April, but economic experts argued the month’s extra working day – due to a Bank Holiday being moved into June to celebrate the Queen's Diamond Jubilee – inflated the numbers.
Nida Ali, economic advisor to Ernst & Young’s ITEM Club, said the apparent strength in the manufacturing data was “superficial”.
“The figures are inflated by the May Day Bank Holiday being pushed into June, giving May an extra working day.
“The last time this happened, in 2002, manufacturing output fell by 6% between May and June.”
Data from the Office for National Statistics (ONS) showed that the manufacture of plastic and rubber products fell 2.6% in May, compared with the same month a year ago.
However output in the same sector rose month-on-month by 3.7%.
The ONS also released the UK’s latest trade deficit figures, which showed the country’s current account deficit in May as £2.7bn, compared with £4.1bn in April.
Exports to European Union (EU) countries increased by £0.6bn in May, while those to non-EU states rose £1.3bn – nearly 11%.
Ali said Eurozone woes were having “a major impact” on UK exporters.
“In the short-term the outlook for exports remains fragile, with the Eurozone likely to slip back into recession and signs of a slowdown in the US and some of the main emerging markets like China and India.
“However, we are more optimistic about prospects further out, providing that the Eurozone remains intact and drags itself out of recession. With domestic demand also weak, manufacturers are likely to see demand continue to decline in the next couple of months."
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