Output data from the Office for National Statistics (ONS) for the manufacturing sector showed output falling by -1.0% compared to June – this reverses almost all of the +1.1% growth recorded in that month compared to May. Over the latest 3 months (May, June and July 2024) total manufacturing output was -0.3% lower than in the previous period (February, March and April 2024) and was down by -0.8% on a year earlier (May, June and July 2023).
In the monthly data, output contracted in 7 of the 13 sub-sectors, with the largest negative contributions coming from the “manufacture of transport equipment” and “manufacture of machinery and equipment” which decreased by -2.3% and -4.7% respectively. Only one industry group, the “manufacture of wood & paper products & printing” managed growth of more than +1%.
However, the monthly data can be volatile, so we will concentrate on the rolling 3-month trends in the rest of this report to ease the variations. At the first level of disaggregation, output of the capital goods industries fell by -0.3% comparing the latest 3 months with the previous period but grew by +1.3% against the same months in 2023. Output of this sub-sector in July 2024 was at 96.8% of its pre-pandemic level (which in the monthly series is taken to have been February 2020 although it was not always the peak level before Covid struck).
The short-term downturn in output that was noted above for the transport equipment group came from the automotive industry where output in the latest 3 months was -3.3% down on the previous period although it was still +8.0% higher than a year earlier, leaving the July level at 110.4% of its pre-pandemic level.
The other major part of the overall “transport equipment” group of industries for the UK is aerospace and the news here is more positive, at least on the short-term comparison where output in the latest 3 months grew by +1.3% compared to the previous period and +3.4% over a year earlier. Despite this growth, however, the July output figure is still only 76.9% of the pre-pandemic level.
Despite a large fall in output in July for the machinery industries, which more than corrected for the sharp upturn in June, the average for the last 3 months was still +2.1% higher than in the February to April period but it was -6.0% lower than a year earlier and the July output level was only 82.2% of the pre-pandemic level.
The other industry in our portfolio of key customers is metal products which continues its steady recovery with output in the latest 3 months being +1.0% higher than in the previous period and +8.1% higher than a year earlier, although there is still room for further improvement with July’s output being 91.9% of its pre-pandemic level.
You can download the ONS Statistical Bulletin from their web-site at https://www.ons.gov.uk/releasecalendar (11 September) or request it from MTA; we also have an analysis of the key industries which is available to members – please contact Geoff Noon ([email protected]) if you would like these charts.