UK Manufacturing Output , August 2022:  It is at this time of the year that the Office for National Statistics (ONS) rebases its data and although this year has not seen a change to the period (we are keeping on 2019 as the base year because of the distortions of the Covid pandemic on 2020), there have been some substantial revisions to the recent past data.

For example, prior to the revisions, total manufacturing output was estimated to have grown by +3.1% in 2019, fallen by -8.9% in 2020 and then recovered by +7.2% in 2021.  The revised picture – and the changes go right back to 1997 – shows trends of +1.1%, +0.1% and +9.7% respectively.  This means that manufacturing output did not fall at all during the pandemic using the annual data (there is a dip in Q2-20 that is more than recovered in the second half of the year) and saw a mini-boom in 2021, although it has fallen back in 2022 and is now below its pre-pandemic level again.

There are similar and sometimes even more dramatic revisions at the sub-sector and industry level but this is not the place for a lengthy explanation.  We will explore some of these at our Forecast Seminar next week as they affects our forecasts, especially for tooling demand which is driven mainly by customers output.

Looking at the data we have for August, total manufacturing output fell by -1.6% compared to July but we prefer to focus on the 3-month rolling trends as this takes out some of the volatility in the high frequency data.  Manufacturing output in the latest 3 months (June, July and August 2022) was -2.3% lower than in the previous 3 months (March, April and May 2022) and was -5.5% down on a year earlier (June, July and August 2021).

The downward trend in the monthly data was repeated in 8 of the 13 groups in the ONS analysis with basic pharmaceutical products, transport equipment (automotive, aerospace, etc.) and basic metals & metal products unfortunately leading the way down.  Manufacturing output in August is 97.9% of the pre-pandemic level – for monthly data, this is defined as being February 2020.

Drilling down into some of the detail and focusing on the 3-month rolling trends, output of the capital goods industries (where most of our customers are classified) in the latest period fell by -1.4% compared to the previous 3 months and by -6.8% compared to a year earlier.  In terms of the pre-pandemic comparison, this is the weakest of the manufacturing sub-sectors with output in August only 95.0% of the February 2020 level.

One of the main impacts of the revisions has been on the aerospace industry;  until now, this has appeared to be languishing at not much above its pandemic low but the new data suggests a spike immediately before the pandemic which was followed by a swift recovery that took output above the pre-pandemic peak, although it fell back in 2021 before recovering modestly again this year.  The latest data for the aerospace industry suggests that output in the latest 3 months was +1.3% higher than in the previous 3 months but -7.5% lower than the same period last year.  The August output level is put at 101.3% of its pre-pandemic level (before the revisions, the July figure as originally published was only 62.4% of the pre-pandemic level!).

The other three of the industries that we focus on have all seen output fall in the latest 3-month period with the automotive industry perhaps the most surprising of these.  The revisions have not made much difference to this industry and with output down by -4.0% on the previous 3 months and by -5.8% on a year earlier, the latest figure is only 67.8% of the pre-pandemic level and, by far, the weakest of our industries in this regard.

For the machinery industry, the revisions suggest a mini-boom in output during 2021, so although the latest 3 month average for output was only -0.3% lower than the previous period, it was -11.4% lower than a year ago.  However, thanks to this “boom”, the August output figure is still 110.7% of that in February 2020.

For the metal products industry, this had been showing a modest amount of growth in recent months but the revisions have turned this into a downward trend that has been running pretty steadily since a peak in December 2020 that had set a new all-time record for this industry.  In the 3 months to August 2022 output fell by -3.9% compared to the previous period and by -12.5% over the same period in 2021.  The August output figure is 85.5% of its pre-pandemic level.

You can download the ONS Statistical Bulletin from their web-site at (12 October) 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 (we can also send you the pre-revision versions for your comparisons.


UK GDP, August 2022:  The data published by the ONS this week sprang a surprise with a fall in GDP being recorded when most commentators expected a small rise compared to July.  This adds to the complications from the re-basing of the data which we discuss above and, with the July figure revised down to just +0.1%, the August figure of a fall of 0.3% makes it almost certain that the UK economy will have contracted in the 3rd quarter.  As a result of the revisions and the fall in August, the monthly estimate for the UK economy now suggests that it is at the same level as before the pandemic (February 2020) – it had previously been estimated to have been +1.1% above that level.

The monthly GDP estimate is based solely on output data and we have already seen the decline for manufacturing;  however, output of the service sector also declined in August, in this case by just -0.1%.  This is a very broad sector and there is a wide range of trends within it that contributed to the overall small reduction.

There was a further fall in both test & trace services and vaccinations which meant that the human health activities group made the largest contribution to the fall in services output despite a rise in GP services.  The other major negative was from arts, entertainment & recreation with a number of major sporting events having taken place in July as well as a fall in activities of libraries, archives, museums & other cultural activities.  The major balance to these declines came from professional, scientific and technical activities which grew by +1.2% following two negative months as a result of growth in all 8 industries within this sub-group.

Overall, output in customer facing services fell by -1.8% in August following revised growth of +0.7% in July.  Output in this group was -8.9% below its pre-pandemic level, while “other” services were +2.1% higher.

The construction lector recorded an increase in output of +0.4% in August and was only just shy of its all-time record level (from May 2022).  This increase cam solely from a rise in new work  (+1.9%) with repair & maintenance activity declining (-2.0%).

There are more details in the range of ONS Statistical Bulletins which can be downloaded from their website at (12 October) or on request from MTA.


UK Productivity, 2nd Quarter 2022:  The latest analysis from the ONS shows that output per hour (the preferred measure of productivity) was +1.8% higher than the average for 2019.  There were increases of +0.9% for output per worker and +0.3% for output per job.

Focusing on the output per hour trends, the latest figures are +0.3% higher than in the previous quarter and +0.4% higher than a year earlier (Q2-21).  The gross value added (GVA) data (used as the output element of this calculation) has been revised as part of the updating conducted by the ONS at this time of year.  In the 2nd quarter of 2022, the improvement in productivity came because the number of hours worked fell slightly while there was modest growth in GVA.  So far, all of this applies to the whole economy.

Analysis by sector shows that the largest contribution to the growth of productivity compared to the 2019 average came from manufacturing with output per hour increasing by +12.1%, thanks to a broadly even combination of fewer hours worked and a rise in GVA.

Construction also saw a significant rise in productivity compared to its pre-pandemic level at +10.3% although in this case it was mainly due to a fall in hours worked with a more modest increase in GVA.  For the service sector, productivity fell by -1.3% compared to the average in 2019 with small falls in both GVA and hours worked.

There are more details in the ONS Statistical Bulletin and data sets which you can download from their web-site at (07 October) or request from MTA (we can point you to the most relevant data tables among the 54 separate sheets!).

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