THE UK manufacturing sector failed to grow and the country’s global goods trade deficit widened in June as exports to non-European Union countries dropped, official figures have revealed, but North Sea oil production jumped.
The overall industrial production and trade figures add to the picture of a sluggish UK economy as the Brexit vote impact bears down on expansion.
Seasonally-adjusted data published yesterday by the Office for National Statistics (ONS) showed UK manufacturing output was flat month-on-month in June.
Broader industrial production, which includes mining and quarrying, oil and gas extraction, and electricity, gas and water supply as well as manufacturing output, rose by 0.5 per cent month-on-month. This rise was driven by a five per cent leap in oil and gas extraction between May and June.
The ONS said this was “due mainly to higher oil production and gas production following an absence of maintenance that usually takes place in June”.
It added: “Use of the redeveloped Schiehallion oil field and use of the new Kraken oil field are contributing to the increase in oil production. Both are expected to increase UK Continental Shelf production over the longer term.”
The UK’s global goods trade deficit widened from £11.3bn in May to £12.7bn in June, much worse than the £11bn forecast by economists. Goods exports to EU markets rose 2.7 per cent month-on-month to £14.04bn in June. However, goods exports to non-EU countries dropped by 7.9 per cent to £13.44bn.
The National Institute of Economic and Social Research estimated yesterday that UK gross domestic product in the three months to July would have been only 0.2 per cent higher than that in the February to April period.
This would mark a continuation of the UK’s far-below-trend growth, amid higher inflation and falling real wages arising from the pound’s post-Brexit vote tumble. Official figures last month showed the UK grew by only 0.3 per cent during the quarter to June.
ONS figures also showed UK construction output fell 0.1 per cent in June, having declined by 0.4 per cent in May.
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