The latest manufacturing output data from the Office for National Statistics (ONS) shows a month-on-month reduction of -0.9% in March but thanks to a strong increase in February, the 1st quarter overall was +0.9% higher than in Q4-2024; however, this was -0.4% down on a year ago at the start of 2024 and still below its pre-pandemic level.
This note will concentrate on the quarterly totals rather than the “noisier” monthly figures and we begin by noting that manufacturing output rose in 10 of the 13 industry groupings, with the largest positive contributions coming from “transport equipment” and “machinery and equipment not elsewhere classified”.
The first level of detail is the sub-sectors, with capital goods (sometimes called investment goods) being of most interest to us. This saw output increase by +1.8% compared to the previous quarter (Q4-2024) which meant that it was the best performing of the sub-sectors on this short-term comparison. However, looking back to the 1st quarter of 2024, output only increased by +0.3% which puts it behind all the other sub-sectors except intermediate goods where output fell on the Q/Q-4 trend.
The picture is slightly different at the industry level where we focus on 4 groups. Machinery (+3.8%), automotive (+2.9%) and aerospace (+2.3%) all saw quarter-on-quarter growth in output, with only metal products seeing a decline (-3.3%).
As with the capital goods sub-sector, the comparison with Q1-2024 is not quite the same; on this measure, only the machinery industry (+4.0%) was at a higher level in the latest data than a year ago, while automotive (-5.5%), metal products (-3.5%) and aerospace (-2.2%) recorded a fall in the level of output.
Data from SMMT on the production of cars and internal combustion engines broadly supports this position, although the percentage changes are larger. Production of engines in Q1-2025 was, coincidentally, +7.8% higher than in both Q4-2025 and Q1-2025, while output of cars increased by +15.3% compared to the previous quarter (mainly because of a weak December which could be holiday related) but was -3.2% lower than at the start of 2024.
You can download the ONS Statistical Bulletin from their website at https://www.ons.gov.uk/releasecalendar (15 May) 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.