A fall in manufacturing output in February this year has shocked economists, according to a report by The Independent.
The report by the Office for National Statistics (ONS) highlights that the manufacturing sector’s output fell by 1.1% – the largest drop for two and half years. What’s more, this figure brought the annual rate of decline down to 1.8%.
There was also much bigger trading gap than economists had predicted, with a rise in EU imports showing a worrying trend for British manufacturers.
Industrial output also dropped by 0.3% month-on-month in February 2016, bringing the year’s fall down to 0.5%, according to the ONS report.
It has been predicted that many large companies have put their investment plans on hold while they await the results of the in/out referendum regarding Britain’s EU membership in June 2016. The recently released figures seem to confirm these fears.
Howard Archer of information and analysis firm IHS said that the numbers were a double whammy of very disappointing news for the UK economy that bodes ill for first-quarter growth prospects.
Regarding the steel industry, in particular, Dennis de Jong, the managing director of forex broker UFX.com, said: "a wealth of cheap steel on the market has seen global prices plummet and, without raising import tariffs or government intervention, many believe the British steel industry will be forced to shut entirely."
Security may be required. Product fees may apply.