Data published this morning by the Office for National Statistics (ONS) shows that manufacturing output fell by -0.6% in October; however, monthly data can be volatile so we prefer to use the rolling 3-month trend which shows no change in output in the latest 3 months and a decline of -0.3% compared to the same period in 2023.
Throughout this note, we will refer to these periods – the latest 3 months are August, September and October 2024, the previous period is May, June and July 2024 and last year is August, September and October 2023.
Manufacturing, despite its relatively small size, is a wide-ranging definition that includes many industries which have little influence on our sector including, for example, production of food and chemicals. Indeed, output contracted in 7 of the 13 sub-sectors in October, with the largest negative contributions coming from “pharmaceuticals”, so it is worth drilling down into the detail.
The first level of this is to look at the capital goods industries (also sometimes called investment goods) which is where most members’ customers will be classified. Although output of this group in the latest 3 months grew by +0.2% compared to the previous period, it was -1.6% lower than a year ago.
Going further and looking at the four key industries for suppliers of manufacturing technology, we get a mixed picture. The best performance comes form the metal goods industry where output increased by +1.0% compared to the previous 3-month period and by +6.8% over the level in the same months of last year.
The automotive group gives us a neutral picture with output in the latest 3 months -0.1% lower than in the previous period but still +1.7% higher than a year ago. However, this is where the good news ends, as output of the machinery (or mechanical engineering) industries fell by -1.4% and -7.5% respectively.
Finally, aerospace output was down by -1.1% on the previous 3 months and by -5.2% compared to 2023. While this may have been affected through global supply chains by the Boeing strike in the USA, this does not hide the fact that UK output in this industry has fallen in 10 of the past 12 months. This is slightly puzzling given the anecdotal evidence regarding the strength of this sector and may be due to the way in which the short-term estimates of output are calculated.
You can download the ONS Statistical Bulletin from their web-site at https://www.ons.gov.uk/releasecalendar (13 December) 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.